Correlation Between AP Mller and Compagnie

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

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

Diversification Opportunities for AP Mller and Compagnie

0.53

Correlation Coefficient

AP Mller  Compagnie

Very weak diversification

The 3 months correlation between AMKBF and Compagnie is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and AP Mller 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 Mller are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of AP Mller i.e., AP Mller and Compagnie go up and down completely randomly.

Pair Corralation between AP Mller and Compagnie

Assuming the 90 days horizon AP Mller is expected to generate 1.28 times more return on investment than Compagnie. However, AP Mller is 1.28 times more volatile than Compagnie de Saint Gobain. It trades about 0.09 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.0 per unit of risk. If you would invest  177,475  in AP Mller on May 9, 2025 and sell it today you would earn a total of  21,525  from holding AP Mller or generate 12.13% return on investment over 90 days.

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

AP Mller   vs.  Compagnie de Saint Gobain

AP Mller

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, AP Mller reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie de Saint

Risk-Adjusted Performance

Weakest

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Compagnie is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AP Mller and Compagnie

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

The idea behind AP Mller and Compagnie de Saint Gobain 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.