Correlation Between Apple and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Sixt Leasing SE, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Sixt Leasing.
Diversification Opportunities for Apple and Sixt Leasing
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Sixt is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Sixt Leasing go up and down completely randomly.
Pair Corralation between Apple and Sixt Leasing
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.75 times more return on investment than Sixt Leasing. However, Apple Inc is 1.33 times less risky than Sixt Leasing. It trades about 0.1 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.18 per unit of risk. If you would invest 21,489 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 596.00 from holding Apple Inc or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Sixt Leasing SE
Performance |
| Timeline |
| Apple Inc |
| Sixt Leasing SE |
Apple and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Sixt Leasing
The main advantage of trading using opposite Apple and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and Sixt Leasing SE 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.| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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