Correlation Between International Container and AP Mller

Can any of the company-specific risk be diversified away by investing in both International Container and AP Mller 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 International Container and AP Mller into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Container Terminal and AP Mller , you can compare the effects of market volatilities on International Container and AP Mller 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 International Container with a short position of AP Mller. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Container and AP Mller.

Diversification Opportunities for International Container and AP Mller

-0.66

Correlation Coefficient

International Container  AP Mller

Excellent diversification

The 3 months correlation between International and AMKBF is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding International Container Termin and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller and International Container 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 International Container Terminal are associated (or correlated) with AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of International Container i.e., International Container and AP Mller go up and down completely randomly.

Pair Corralation between International Container and AP Mller

Assuming the 90 days horizon International Container Terminal is expected to under-perform the AP Mller. In addition to that, International Container is 1.47 times more volatile than AP Mller . It trades about -0.01 of its total potential returns per unit of risk. AP Mller is currently generating about 0.08 per unit of volatility. If you would invest  152,192  in AP Mller on September 15, 2024 and sell it today you would earn a total of  17,030  from holding AP Mller or generate 11.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

International Container Termin  vs.  AP Mller

International Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Container Terminal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, International Container is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AP Mller

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, AP Mller may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with International Container and AP Mller

The main advantage of trading using opposite International Container and AP Mller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Container position performs unexpectedly, AP Mller 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 Mller will offset losses from the drop in AP Mller's long position.

The idea behind International Container Terminal 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.