Correlation Between G8 EDUCATION and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and Sixt Leasing 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 G8 EDUCATION and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 EDUCATION and Sixt Leasing SE, you can compare the effects of market volatilities on G8 EDUCATION and Sixt Leasing 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 G8 EDUCATION with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and Sixt Leasing.
Diversification Opportunities for G8 EDUCATION and Sixt Leasing
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 3EAG and Sixt is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and Sixt Leasing go up and down completely randomly.
Pair Corralation between G8 EDUCATION and Sixt Leasing
Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 0.58 times more return on investment than Sixt Leasing. However, G8 EDUCATION is 1.73 times less risky than Sixt Leasing. It trades about 0.01 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.04 per unit of risk. If you would invest 81.00 in G8 EDUCATION on September 13, 2024 and sell it today you would earn a total of 0.00 from holding G8 EDUCATION or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 EDUCATION vs. Sixt Leasing SE
Performance |
| Timeline |
| G8 EDUCATION |
| Sixt Leasing SE |
G8 EDUCATION and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 EDUCATION and Sixt Leasing
The main advantage of trading using opposite G8 EDUCATION and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, Sixt Leasing 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 Sixt Leasing will offset losses from the drop in Sixt Leasing's long position.| G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Apple Inc |
| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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