Correlation Between Perimeter Solutions and Sembcorp Marine

Can any of the company-specific risk be diversified away by investing in both Perimeter Solutions and Sembcorp Marine 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 Perimeter Solutions and Sembcorp Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perimeter Solutions SA and Sembcorp Marine, you can compare the effects of market volatilities on Perimeter Solutions and Sembcorp Marine 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 Perimeter Solutions with a short position of Sembcorp Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Solutions and Sembcorp Marine.

Diversification Opportunities for Perimeter Solutions and Sembcorp Marine

-0.42

Correlation Coefficient

Perimeter Solutions  Sembcorp Marine

Very good diversification

The 3 months correlation between Perimeter and Sembcorp is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Sembcorp Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sembcorp Marine and Perimeter Solutions 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 Perimeter Solutions SA are associated (or correlated) with Sembcorp Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sembcorp Marine has no effect on the direction of Perimeter Solutions i.e., Perimeter Solutions and Sembcorp Marine go up and down completely randomly.

Pair Corralation between Perimeter Solutions and Sembcorp Marine

Considering the 90-day investment horizon Perimeter Solutions SA is expected to generate 0.27 times more return on investment than Sembcorp Marine. However, Perimeter Solutions SA is 3.65 times less risky than Sembcorp Marine. It trades about 0.17 of its potential returns per unit of risk. Sembcorp Marine is currently generating about 0.0 per unit of risk. If you would invest  1,706  in Perimeter Solutions SA on July 18, 2025 and sell it today you would earn a total of  493.00  from holding Perimeter Solutions SA or generate 28.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Perimeter Solutions SA  vs.  Sembcorp Marine

Perimeter Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Solutions SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Perimeter Solutions displayed solid returns over the last few months and may actually be approaching a breakup point.

Sembcorp Marine

Risk-Adjusted Performance

Weakest

Over the last 90 days Sembcorp Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Sembcorp Marine is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Perimeter Solutions and Sembcorp Marine

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

The idea behind Perimeter Solutions SA and Sembcorp Marine 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.