Correlation Between Phoenix and Sime Darby
Can any of the company-specific risk be diversified away by investing in both Phoenix and Sime Darby 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 Phoenix and Sime Darby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Motor Common and Sime Darby Bhd, you can compare the effects of market volatilities on Phoenix and Sime Darby 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 Phoenix with a short position of Sime Darby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix and Sime Darby.
Diversification Opportunities for Phoenix and Sime Darby
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Phoenix and Sime is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Motor Common and Sime Darby Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sime Darby Bhd and Phoenix 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 Phoenix Motor Common are associated (or correlated) with Sime Darby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sime Darby Bhd has no effect on the direction of Phoenix i.e., Phoenix and Sime Darby go up and down completely randomly.
Pair Corralation between Phoenix and Sime Darby
Considering the 90-day investment horizon Phoenix Motor Common is expected to generate 6.23 times more return on investment than Sime Darby. However, Phoenix is 6.23 times more volatile than Sime Darby Bhd. It trades about 0.03 of its potential returns per unit of risk. Sime Darby Bhd is currently generating about 0.07 per unit of risk. If you would invest 71.00 in Phoenix Motor Common on August 28, 2024 and sell it today you would lose (38.00) from holding Phoenix Motor Common or give up 53.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 45.48% |
| Values | Daily Returns |
Phoenix Motor Common vs. Sime Darby Bhd
Performance |
| Timeline |
| Phoenix Motor Common |
| Sime Darby Bhd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Phoenix and Sime Darby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix and Sime Darby
The main advantage of trading using opposite Phoenix and Sime Darby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix position performs unexpectedly, Sime Darby 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 Sime Darby will offset losses from the drop in Sime Darby's long position.| Phoenix vs. GreenPower Motor | Phoenix vs. Envirotech Vehicles | Phoenix vs. Volcon Inc | Phoenix vs. Zapp Electric Vehicles |
| Sime Darby vs. Zapp Electric Vehicles | Sime Darby vs. First Hydrogen Corp | Sime Darby vs. Guangzhou Automobile Group | Sime Darby vs. Phoenix Motor Common |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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