Correlation Between APPLIED MATERIALS and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS 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 APPLIED MATERIALS and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and Sixt Leasing SE, you can compare the effects of market volatilities on APPLIED MATERIALS 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 APPLIED MATERIALS with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Sixt Leasing.
Diversification Opportunities for APPLIED MATERIALS and Sixt Leasing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APPLIED and Sixt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS i.e., APPLIED MATERIALS and Sixt Leasing go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Sixt Leasing
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 1.29 times more return on investment than Sixt Leasing. However, APPLIED MATERIALS is 1.29 times more volatile than Sixt Leasing SE. It trades about 0.13 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 16,148 in APPLIED MATERIALS on October 14, 2024 and sell it today you would earn a total of 580.00 from holding APPLIED MATERIALS or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. Sixt Leasing SE
Performance |
| Timeline |
| APPLIED MATERIALS |
| Sixt Leasing SE |
APPLIED MATERIALS and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Sixt Leasing
The main advantage of trading using opposite APPLIED MATERIALS and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS 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.| APPLIED MATERIALS vs. JD SPORTS FASH | APPLIED MATERIALS vs. WIZZ AIR HLDGUNSPADR4 | APPLIED MATERIALS vs. SPORTING | APPLIED MATERIALS vs. Fukuyama Transporting Co |
| Sixt Leasing vs. Titan Machinery | Sixt Leasing vs. Compagnie Plastic Omnium | Sixt Leasing vs. APPLIED MATERIALS | Sixt Leasing vs. GOODYEAR T RUBBER |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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