Correlation Between Sime Darby and Volcon

Can any of the company-specific risk be diversified away by investing in both Sime Darby and Volcon 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 Volcon 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 Volcon Inc, you can compare the effects of market volatilities on Sime Darby and Volcon 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 Volcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sime Darby and Volcon.

Diversification Opportunities for Sime Darby and Volcon

0.0

Correlation Coefficient

Sime Darby  Volcon

Pay attention - limited upside

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

Pair Corralation between Sime Darby and Volcon

If you would invest (100.00) in Sime Darby Bhd on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Sime Darby Bhd or generate -100.0% 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.  Volcon Inc

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.

Volcon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volcon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sime Darby and Volcon

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

The idea behind Sime Darby Bhd and Volcon Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.