Correlation Between AP Moeller and Snipp Interactive

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

By analyzing existing cross correlation between AP Moeller Maersk AS and Snipp Interactive, you can compare the effects of market volatilities on AP Moeller and Snipp Interactive 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 AP Moeller with a short position of Snipp Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Snipp Interactive.

Diversification Opportunities for AP Moeller and Snipp Interactive

0.26

Correlation Coefficient

AP Moeller  Snipp Interactive

Modest diversification

The 3 months correlation between AMKBY and Snipp is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and Snipp Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snipp Interactive and AP Moeller 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 AP Moeller Maersk AS are associated (or correlated) with Snipp Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snipp Interactive has no effect on the direction of AP Moeller i.e., AP Moeller and Snipp Interactive go up and down completely randomly.

Pair Corralation between AP Moeller and Snipp Interactive

Assuming the 90 days horizon AP Moeller Maersk AS is expected to generate 0.59 times more return on investment than Snipp Interactive. However, AP Moeller Maersk AS is 1.71 times less risky than Snipp Interactive. It trades about 0.29 of its potential returns per unit of risk. Snipp Interactive is currently generating about -0.24 per unit of risk. If you would invest  644.00  in AP Moeller Maersk AS on January 30, 2024 and sell it today you would earn a total of  90.00  from holding AP Moeller Maersk AS or generate 13.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AP Moeller Maersk AS  vs.  Snipp Interactive

AP Moeller Maersk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Moeller Maersk AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Snipp Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AP Moeller and Snipp Interactive

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

The idea behind AP Moeller Maersk AS and Snipp Interactive 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.