Correlation Between HK Electric and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both HK Electric 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 HK Electric and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Electric Investments and Sixt Leasing SE, you can compare the effects of market volatilities on HK Electric 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 HK Electric with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and Sixt Leasing.
Diversification Opportunities for HK Electric and Sixt Leasing
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKT and Sixt is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments 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 HK Electric 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 HK Electric Investments 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 HK Electric i.e., HK Electric and Sixt Leasing go up and down completely randomly.
Pair Corralation between HK Electric and Sixt Leasing
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 2.0 times more return on investment than Sixt Leasing. However, HK Electric is 2.0 times more volatile than Sixt Leasing SE. It trades about 0.09 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.02 per unit of risk. If you would invest 18.00 in HK Electric Investments on October 28, 2024 and sell it today you would earn a total of 46.00 from holding HK Electric Investments or generate 255.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. Sixt Leasing SE
Performance |
| Timeline |
| HK Electric Investments |
| Sixt Leasing SE |
HK Electric and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and Sixt Leasing
The main advantage of trading using opposite HK Electric and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric 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.| HK Electric vs. Vishay Intertechnology | HK Electric vs. STRAYER EDUCATION | HK Electric vs. Xinhua Winshare Publishing | HK Electric vs. UPDATE SOFTWARE |
| Sixt Leasing vs. Nippon Steel | Sixt Leasing vs. Motorcar Parts of | Sixt Leasing vs. CARSALESCOM | Sixt Leasing vs. Commercial Vehicle Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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