Correlation Between Eaton PLC and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both Eaton PLC 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 Eaton PLC and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton PLC and Sixt Leasing SE, you can compare the effects of market volatilities on Eaton PLC 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 Eaton PLC with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton PLC and Sixt Leasing.
Diversification Opportunities for Eaton PLC and Sixt Leasing
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eaton and Sixt is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eaton PLC 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 Eaton PLC 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 Eaton PLC 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 Eaton PLC i.e., Eaton PLC and Sixt Leasing go up and down completely randomly.
Pair Corralation between Eaton PLC and Sixt Leasing
Assuming the 90 days horizon Eaton PLC is expected to under-perform the Sixt Leasing. In addition to that, Eaton PLC is 2.28 times more volatile than Sixt Leasing SE. It trades about -0.2 of its total potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.13 per unit of volatility. If you would invest 925.00 in Sixt Leasing SE on November 27, 2024 and sell it today you would lose (20.00) from holding Sixt Leasing SE or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton PLC vs. Sixt Leasing SE
Performance |
| Timeline |
| Eaton PLC |
| Sixt Leasing SE |
Eaton PLC and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton PLC and Sixt Leasing
The main advantage of trading using opposite Eaton PLC and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton PLC 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.| Eaton PLC vs. Infrastrutture Wireless Italiane | Eaton PLC vs. Vishay Intertechnology | Eaton PLC vs. Tower One Wireless | Eaton PLC vs. Cognizant Technology Solutions |
| Sixt Leasing vs. CHINA TONTINE WINES | Sixt Leasing vs. VIVA WINE GROUP | Sixt Leasing vs. Marie Brizard Wine | Sixt Leasing vs. NEWELL RUBBERMAID |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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