Correlation Between AP Moeller and Red Rock
Can any of the company-specific risk be diversified away by investing in both AP Moeller and Red Rock 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 Red Rock 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 Red Rock Resorts, you can compare the effects of market volatilities on AP Moeller and Red Rock 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 Red Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and Red Rock.
Diversification Opportunities for AP Moeller and Red Rock
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMKBY and Red is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller Maersk AS and Red Rock Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Rock Resorts 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 Red Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Rock Resorts has no effect on the direction of AP Moeller i.e., AP Moeller and Red Rock go up and down completely randomly.
Pair Corralation between AP Moeller and Red Rock
Assuming the 90 days horizon AP Moeller is expected to generate 1.37 times less return on investment than Red Rock. In addition to that, AP Moeller is 1.21 times more volatile than Red Rock Resorts. It trades about 0.17 of its total potential returns per unit of risk. Red Rock Resorts is currently generating about 0.28 per unit of volatility. If you would invest 4,347 in Red Rock Resorts on March 10, 2025 and sell it today you would earn a total of 657.00 from holding Red Rock Resorts or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Moeller Maersk AS vs. Red Rock Resorts
Performance |
| Timeline |
| AP Moeller Maersk |
| Red Rock Resorts |
AP Moeller and Red Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Moeller and Red Rock
The main advantage of trading using opposite AP Moeller and Red Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, Red Rock 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 Red Rock will offset losses from the drop in Red Rock's long position.| AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Nippon Yusen Kabushiki | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. AP Moeller |
| Red Rock vs. Golden Entertainment | Red Rock vs. Century Casinos | Red Rock vs. Studio City International | Red Rock vs. Ballys Corp |
Check out your portfolio center.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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