Correlation Between Microsoft and AP Moeller
Can any of the company-specific risk be diversified away by investing in both Microsoft and AP Moeller 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 Microsoft and AP Moeller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and AP Moeller Maersk AS, you can compare the effects of market volatilities on Microsoft and AP Moeller 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 Microsoft with a short position of AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and AP Moeller.
Diversification Opportunities for Microsoft and AP Moeller
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and AMKBY is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and AP Moeller Maersk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller Maersk and Microsoft 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 Microsoft are associated (or correlated) with AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller Maersk has no effect on the direction of Microsoft i.e., Microsoft and AP Moeller go up and down completely randomly.
Pair Corralation between Microsoft and AP Moeller
Given the investment horizon of 90 days Microsoft is expected to generate 3.36 times less return on investment than AP Moeller. But when comparing it to its historical volatility, Microsoft is 2.23 times less risky than AP Moeller. It trades about 0.06 of its potential returns per unit of risk. AP Moeller Maersk AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 746.00 in AP Moeller Maersk AS on September 12, 2024 and sell it today you would earn a total of 99.00 from holding AP Moeller Maersk AS or generate 13.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Microsoft vs. AP Moeller Maersk AS
Performance |
Timeline |
Microsoft |
AP Moeller Maersk |
Microsoft and AP Moeller Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microsoft and AP Moeller
The main advantage of trading using opposite Microsoft and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, AP Moeller 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 Moeller will offset losses from the drop in AP Moeller's long position.Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Nippon Yusen Kabushiki | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. AP Moeller |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |