Correlation Between JAPAN AIRLINES and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES 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 JAPAN AIRLINES and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Sixt Leasing SE, you can compare the effects of market volatilities on JAPAN AIRLINES 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 JAPAN AIRLINES with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Sixt Leasing.
Diversification Opportunities for JAPAN AIRLINES and Sixt Leasing
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and Sixt is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES i.e., JAPAN AIRLINES and Sixt Leasing go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Sixt Leasing
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to under-perform the Sixt Leasing. But the stock apears to be less risky and, when comparing its historical volatility, JAPAN AIRLINES is 1.6 times less risky than Sixt Leasing. The stock trades about -0.41 of its potential returns per unit of risk. The Sixt Leasing SE is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Sixt Leasing SE on October 11, 2024 and sell it today you would lose (50.00) from holding Sixt Leasing SE or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. Sixt Leasing SE
Performance |
| Timeline |
| JAPAN AIRLINES |
| Sixt Leasing SE |
JAPAN AIRLINES and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Sixt Leasing
The main advantage of trading using opposite JAPAN AIRLINES and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES 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.| JAPAN AIRLINES vs. National Beverage Corp | JAPAN AIRLINES vs. INDOFOOD AGRI RES | JAPAN AIRLINES vs. GRIFFIN MINING LTD | JAPAN AIRLINES vs. VIVA WINE GROUP |
| Sixt Leasing vs. SYSTEMAIR AB | Sixt Leasing vs. Entravision Communications | Sixt Leasing vs. FORWARD AIR P | Sixt Leasing vs. Cogent Communications Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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