Correlation Between Sime Darby and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Sime Darby and Volkswagen 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 Volkswagen 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 Volkswagen AG 110, you can compare the effects of market volatilities on Sime Darby and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sime Darby and Volkswagen.
Diversification Opportunities for Sime Darby and Volkswagen
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sime and Volkswagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sime Darby Bhd and Volkswagen AG 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 110 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG 110 has no effect on the direction of Sime Darby i.e., Sime Darby and Volkswagen go up and down completely randomly.
Pair Corralation between Sime Darby and Volkswagen
If you would invest 977.00 in Volkswagen AG 110 on November 18, 2024 and sell it today you would earn a total of 103.00 from holding Volkswagen AG 110 or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sime Darby Bhd vs. Volkswagen AG 110
Performance |
| Timeline |
| Sime Darby Bhd |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Volkswagen AG 110 |
Sime Darby and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sime Darby and Volkswagen
The main advantage of trading using opposite Sime Darby and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sime Darby position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen'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 |
| Volkswagen vs. Porsche Automobile Holding | Volkswagen vs. Volkswagen AG | Volkswagen vs. Mercedes Benz Group AG | Volkswagen vs. Volkswagen AG Pref |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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