Correlation Between Exor NV and Porsche Automobil
Can any of the company-specific risk be diversified away by investing in both Exor NV and Porsche Automobil 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 Exor NV and Porsche Automobil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exor NV and Porsche Automobil Holding, you can compare the effects of market volatilities on Exor NV and Porsche Automobil 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 Exor NV with a short position of Porsche Automobil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exor NV and Porsche Automobil.
Diversification Opportunities for Exor NV and Porsche Automobil
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Exor and Porsche is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Porsche Automobil Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porsche Automobil Holding and Exor NV 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 Exor NV are associated (or correlated) with Porsche Automobil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porsche Automobil Holding has no effect on the direction of Exor NV i.e., Exor NV and Porsche Automobil go up and down completely randomly.
Pair Corralation between Exor NV and Porsche Automobil
Assuming the 90 days horizon Exor NV is expected to generate 1.03 times more return on investment than Porsche Automobil. However, Exor NV is 1.03 times more volatile than Porsche Automobil Holding. It trades about -0.12 of its potential returns per unit of risk. Porsche Automobil Holding is currently generating about -0.4 per unit of risk. If you would invest 10,560 in Exor NV on September 4, 2024 and sell it today you would lose (582.00) from holding Exor NV or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exor NV vs. Porsche Automobil Holding
Performance |
| Timeline |
| Exor NV |
| Porsche Automobil Holding |
Exor NV and Porsche Automobil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exor NV and Porsche Automobil
The main advantage of trading using opposite Exor NV and Porsche Automobil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exor NV position performs unexpectedly, Porsche Automobil 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 Porsche Automobil will offset losses from the drop in Porsche Automobil's long position.| Exor NV vs. Porsche Automobil Holding | Exor NV vs. Porsche Automobile Holding | Exor NV vs. Volkswagen AG 110 | Exor NV vs. Bayerische Motoren Werke |
| Porsche Automobil vs. Volkswagen AG Pref | Porsche Automobil vs. Volkswagen AG 110 | Porsche Automobil vs. Ferrari NV | Porsche Automobil vs. Bayerische Motoren Werke |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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