Correlation Between JLF INVESTMENT and AP Møller

Can any of the company-specific risk be diversified away by investing in both JLF INVESTMENT and AP Møller at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JLF INVESTMENT and AP Møller into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JLF INVESTMENT and AP Mller , you can compare the effects of market volatilities on JLF INVESTMENT and AP Møller and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JLF INVESTMENT with a short position of AP Møller. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLF INVESTMENT and AP Møller.

Diversification Opportunities for JLF INVESTMENT and AP Møller

0.0

Correlation Coefficient

JLF INVESTMENT  AP Møller

Pay attention - limited upside

The 3 months correlation between JLF and DP4B is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JLF INVESTMENT and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Møller and JLF INVESTMENT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JLF INVESTMENT are associated (or correlated) with AP Møller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Møller has no effect on the direction of JLF INVESTMENT i.e., JLF INVESTMENT and AP Møller go up and down completely randomly.

Pair Corralation between JLF INVESTMENT and AP Møller

If you would invest  158,800  in AP Mller on September 16, 2024 and sell it today you would earn a total of  2,750  from holding AP Mller or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JLF INVESTMENT  vs.  AP Mller

JLF INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLF INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLF INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AP Møller

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Møller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JLF INVESTMENT and AP Møller

The main advantage of trading using opposite JLF INVESTMENT and AP Møller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLF INVESTMENT position performs unexpectedly, AP Møller can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AP Møller will offset losses from the drop in AP Møller's long position.

The idea behind JLF INVESTMENT and AP Mller pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.