Correlation Between Sime Darby and PTRA
Can any of the company-specific risk be diversified away by investing in both Sime Darby and PTRA 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 PTRA 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 PTRA, you can compare the effects of market volatilities on Sime Darby and PTRA 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 PTRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sime Darby and PTRA.
Diversification Opportunities for Sime Darby and PTRA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sime and PTRA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sime Darby Bhd and PTRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTRA 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 PTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTRA has no effect on the direction of Sime Darby i.e., Sime Darby and PTRA go up and down completely randomly.
Pair Corralation between Sime Darby and PTRA
If you would invest 154.00 in PTRA on August 28, 2024 and sell it today you would earn a total of 0.00 from holding PTRA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sime Darby Bhd vs. PTRA
Performance |
| Timeline |
| Sime Darby Bhd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PTRA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sime Darby and PTRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sime Darby and PTRA
The main advantage of trading using opposite Sime Darby and PTRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sime Darby position performs unexpectedly, PTRA 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 PTRA will offset losses from the drop in PTRA'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 |
| PTRA vs. Faraday Future Intelligent | PTRA vs. Mullen Automotive | PTRA vs. Canoo Inc | PTRA vs. Hyzon Motors |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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