Correlation Between Ford and Sixt SE
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By analyzing existing cross correlation between Ford Motor and Sixt SE, you can compare the effects of market volatilities on Ford and Sixt SE 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 Ford with a short position of Sixt SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sixt SE.
Diversification Opportunities for Ford and Sixt SE
Modest diversification
The 3 months correlation between Ford and Sixt is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE and Ford 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 Ford Motor are associated (or correlated) with Sixt SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt SE has no effect on the direction of Ford i.e., Ford and Sixt SE go up and down completely randomly.
Pair Corralation between Ford and Sixt SE
Taking into account the 90-day investment horizon Ford is expected to generate 1.67 times less return on investment than Sixt SE. In addition to that, Ford is 1.29 times more volatile than Sixt SE. It trades about 0.01 of its total potential returns per unit of risk. Sixt SE is currently generating about 0.02 per unit of volatility. If you would invest 4,850 in Sixt SE on September 4, 2024 and sell it today you would earn a total of 420.00 from holding Sixt SE or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Ford Motor vs. Sixt SE
Performance |
| Timeline |
| Ford Motor |
| Sixt SE |
Ford and Sixt SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Sixt SE
The main advantage of trading using opposite Ford and Sixt SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sixt SE 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 SE will offset losses from the drop in Sixt SE's long position.The idea behind Ford Motor and Sixt 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.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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