Correlation Between AP Moeller and Microsoft

Can any of the company-specific risk be diversified away by investing in both AP Moeller and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on AP Moeller and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Microsoft.

Diversification Opportunities for AP Moeller and Microsoft

0.75

Correlation Coefficient

AP Moeller  Microsoft

Poor diversification

The 3 months correlation between AMKBY and Microsoft is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of AP Moeller i.e., AP Moeller and Microsoft go up and down completely randomly.

Pair Corralation between AP Moeller and Microsoft

Assuming the 90 days horizon AP Moeller Maersk AS is expected to generate 2.15 times more return on investment than Microsoft. However, AP Moeller is 2.15 times more volatile than Microsoft. It trades about 0.12 of its potential returns per unit of risk. Microsoft is currently generating about 0.24 per unit of risk. If you would invest  843.00  in AP Moeller Maersk AS on May 6, 2025 and sell it today you would earn a total of  140.00  from holding AP Moeller Maersk AS or generate 16.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

AP Moeller Maersk AS  vs.  Microsoft

AP Moeller Maersk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller Maersk AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, AP Moeller showed solid returns over the last few months and may actually be approaching a breakup point.

Microsoft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Microsoft displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AP Moeller and Microsoft

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

The idea behind AP Moeller Maersk AS and Microsoft 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.