Correlation Between AP Mller and DFDS A/S

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

By analyzing existing cross correlation between AP Mller and DFDS AS, you can compare the effects of market volatilities on AP Mller and DFDS A/S 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 DFDS A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and DFDS A/S.

Diversification Opportunities for AP Mller and DFDS A/S

0.78

Correlation Coefficient

AP Mller  DFDS A/S

Poor diversification

The 3 months correlation between DP4A and DFDS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS A/S 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 DFDS A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS A/S has no effect on the direction of AP Mller i.e., AP Mller and DFDS A/S go up and down completely randomly.

Pair Corralation between AP Mller and DFDS A/S

Assuming the 90 days trading horizon AP Mller is expected to generate 1.42 times less return on investment than DFDS A/S. In addition to that, AP Mller is 1.18 times more volatile than DFDS AS. It trades about 0.15 of its total potential returns per unit of risk. DFDS AS is currently generating about 0.25 per unit of volatility. If you would invest  1,136  in DFDS AS on April 22, 2025 and sell it today you would earn a total of  451.00  from holding DFDS AS or generate 39.7% return on investment over 90 days.

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

AP Mller   vs.  DFDS AS

AP Mller

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Mller reported solid returns over the last few months and may actually be approaching a breakup point.

DFDS A/S

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DFDS AS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, DFDS A/S reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AP Mller and DFDS A/S

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

The idea behind AP Mller and DFDS AS 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.