Correlation Between SGS SA and AP Moeller

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

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

Diversification Opportunities for SGS SA and AP Moeller

0.21

Correlation Coefficient

SGS SA  AP Moeller

Modest diversification

The 3 months correlation between SGS and AMKAF is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and SGS SA 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 SGS SA 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 has no effect on the direction of SGS SA i.e., SGS SA and AP Moeller go up and down completely randomly.

Pair Corralation between SGS SA and AP Moeller

Assuming the 90 days horizon SGS SA is expected to under-perform the AP Moeller. But the pink sheet apears to be less risky and, when comparing its historical volatility, SGS SA is 3.46 times less risky than AP Moeller. The pink sheet trades about -0.04 of its potential returns per unit of risk. The AP Moeller is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  189,476  in AP Moeller on May 15, 2025 and sell it today you would earn a total of  30,024  from holding AP Moeller or generate 15.85% return on investment over 90 days.

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

SGS SA  vs.  AP Moeller

SGS SA

Risk-Adjusted Performance

Weakest

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

AP Moeller

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Moeller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGS SA and AP Moeller

The main advantage of trading using opposite SGS SA and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGS SA 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.

The idea behind SGS SA and AP Moeller 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.