Correlation Between Exor NV and Sime Darby

Can any of the company-specific risk be diversified away by investing in both Exor NV and Sime Darby 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 Exor NV and Sime Darby into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exor NV and Sime Darby Bhd, you can compare the effects of market volatilities on Exor NV and Sime Darby 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 Exor NV with a short position of Sime Darby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exor NV and Sime Darby.

Diversification Opportunities for Exor NV and Sime Darby

0.0

Correlation Coefficient

Exor NV  Sime Darby

Pay attention - limited upside

The 3 months correlation between Exor and Sime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Sime Darby Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sime Darby Bhd and Exor NV 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 Exor NV are associated (or correlated) with Sime Darby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sime Darby Bhd has no effect on the direction of Exor NV i.e., Exor NV and Sime Darby go up and down completely randomly.

Pair Corralation between Exor NV and Sime Darby

If you would invest  9,094  in Exor NV on December 27, 2024 and sell it today you would earn a total of  906.00  from holding Exor NV or generate 9.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Exor NV  vs.  Sime Darby Bhd

Exor NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exor NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Exor NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sime Darby Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sime Darby Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Sime Darby is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Exor NV and Sime Darby

The main advantage of trading using opposite Exor NV and Sime Darby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exor NV position performs unexpectedly, Sime Darby 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 Sime Darby will offset losses from the drop in Sime Darby's long position.

The idea behind Exor NV and Sime Darby Bhd 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.