Correlation Between Sime Darby and Porsche Automobile
Can any of the company-specific risk be diversified away by investing in both Sime Darby and Porsche Automobile 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 Sime Darby and Porsche Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sime Darby Bhd and Porsche Automobile Holding, you can compare the effects of market volatilities on Sime Darby and Porsche Automobile 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 Sime Darby with a short position of Porsche Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sime Darby and Porsche Automobile.
Diversification Opportunities for Sime Darby and Porsche Automobile
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sime and Porsche is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sime Darby Bhd and Porsche Automobile Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porsche Automobile and Sime Darby 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 Sime Darby Bhd are associated (or correlated) with Porsche Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porsche Automobile has no effect on the direction of Sime Darby i.e., Sime Darby and Porsche Automobile go up and down completely randomly.
Pair Corralation between Sime Darby and Porsche Automobile
If you would invest 51.00 in Sime Darby Bhd on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Sime Darby Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Sime Darby Bhd vs. Porsche Automobile Holding
Performance |
| Timeline |
| Sime Darby Bhd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Porsche Automobile |
Sime Darby and Porsche Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sime Darby and Porsche Automobile
The main advantage of trading using opposite Sime Darby and Porsche Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sime Darby position performs unexpectedly, Porsche Automobile 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 Automobile will offset losses from the drop in Porsche Automobile's long position.| Sime Darby vs. Zapp Electric Vehicles | Sime Darby vs. First Hydrogen Corp | Sime Darby vs. Guangzhou Automobile Group | Sime Darby vs. Phoenix Motor Common |
| Porsche Automobile vs. Volkswagen AG 110 | Porsche Automobile vs. Bayerische Motoren Werke | Porsche Automobile vs. Volkswagen AG | Porsche Automobile vs. Mercedes Benz Group AG |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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