Correlation Between Stellantis and Porsche Automobil
Can any of the company-specific risk be diversified away by investing in both Stellantis and Porsche Automobil 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 Stellantis and Porsche Automobil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and Porsche Automobil Holding, you can compare the effects of market volatilities on Stellantis and Porsche Automobil 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 Stellantis with a short position of Porsche Automobil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and Porsche Automobil.
Diversification Opportunities for Stellantis and Porsche Automobil
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stellantis and Porsche is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and Porsche Automobil Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porsche Automobil Holding and Stellantis 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 Stellantis NV are associated (or correlated) with Porsche Automobil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porsche Automobil Holding has no effect on the direction of Stellantis i.e., Stellantis and Porsche Automobil go up and down completely randomly.
Pair Corralation between Stellantis and Porsche Automobil
Given the investment horizon of 90 days Stellantis is expected to generate 1.13 times less return on investment than Porsche Automobil. In addition to that, Stellantis is 1.22 times more volatile than Porsche Automobil Holding. It trades about 0.1 of its total potential returns per unit of risk. Porsche Automobil Holding is currently generating about 0.14 per unit of volatility. If you would invest 3,780 in Porsche Automobil Holding on November 1, 2024 and sell it today you would earn a total of 161.00 from holding Porsche Automobil Holding or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellantis NV vs. Porsche Automobil Holding
Performance |
| Timeline |
| Stellantis NV |
| Porsche Automobil Holding |
Stellantis and Porsche Automobil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and Porsche Automobil
The main advantage of trading using opposite Stellantis and Porsche Automobil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis position performs unexpectedly, Porsche Automobil 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 Automobil will offset losses from the drop in Porsche Automobil's long position.| Stellantis vs. Porsche Automobile Holding | Stellantis vs. Toyota Motor | Stellantis vs. Honda Motor Co | Stellantis vs. General Motors |
| Porsche Automobil vs. Volkswagen AG Pref | Porsche Automobil vs. Volkswagen AG 110 | Porsche Automobil vs. Ferrari NV | Porsche Automobil 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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