Correlation Between Compagnie and AP Møller

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

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

Diversification Opportunities for Compagnie and AP Møller

0.42

Correlation Coefficient

Compagnie  AP Møller

Very weak diversification

The 3 months correlation between Compagnie and AMKBF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Møller and Compagnie 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 Compagnie de Saint Gobain are associated (or correlated) with AP Møller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Møller has no effect on the direction of Compagnie i.e., Compagnie and AP Møller go up and down completely randomly.

Pair Corralation between Compagnie and AP Møller

Assuming the 90 days horizon Compagnie is expected to generate 6.53 times less return on investment than AP Møller. But when comparing it to its historical volatility, Compagnie de Saint Gobain is 1.49 times less risky than AP Møller. It trades about 0.03 of its potential returns per unit of risk. AP Mller is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  192,717  in AP Mller on May 21, 2025 and sell it today you would earn a total of  28,997  from holding AP Mller or generate 15.05% return on investment over 90 days.

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

Compagnie de Saint Gobain  vs.  AP Mller

Compagnie de Saint

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Compagnie is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AP Møller

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, AP Møller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compagnie and AP Møller

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

The idea behind Compagnie de Saint Gobain 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.