Correlation Between Porsche Automobil and Exor NV

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Can any of the company-specific risk be diversified away by investing in both Porsche Automobil and Exor NV 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 Porsche Automobil and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Porsche Automobil Holding and Exor NV, you can compare the effects of market volatilities on Porsche Automobil and Exor NV 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 Porsche Automobil with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porsche Automobil and Exor NV.

Diversification Opportunities for Porsche Automobil and Exor NV

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Porsche and Exor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Porsche Automobil Holding and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and Porsche Automobil 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 Porsche Automobil Holding are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Porsche Automobil i.e., Porsche Automobil and Exor NV go up and down completely randomly.

Pair Corralation between Porsche Automobil and Exor NV

Assuming the 90 days horizon Porsche Automobil Holding is expected to under-perform the Exor NV. In addition to that, Porsche Automobil is 1.12 times more volatile than Exor NV. It trades about -0.16 of its total potential returns per unit of risk. Exor NV is currently generating about -0.06 per unit of volatility. If you would invest  10,181  in Exor NV on September 12, 2024 and sell it today you would lose (281.00) from holding Exor NV or give up 2.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Porsche Automobil Holding  vs.  Exor NV

 Performance 
       Timeline  
Porsche Automobil Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Porsche Automobil Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Exor NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Exor NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Exor NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Porsche Automobil and Exor NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Porsche Automobil and Exor NV

The main advantage of trading using opposite Porsche Automobil and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Porsche Automobil position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.
The idea behind Porsche Automobil Holding and Exor NV 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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