Correlation Between Sixt Leasing and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and Summit Materials 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 Sixt Leasing and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt Leasing SE and Summit Materials, you can compare the effects of market volatilities on Sixt Leasing and Summit Materials 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 Sixt Leasing with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and Summit Materials.
Diversification Opportunities for Sixt Leasing and Summit Materials
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sixt and Summit is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Sixt Leasing 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 Sixt Leasing SE are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Summit Materials go up and down completely randomly.
Pair Corralation between Sixt Leasing and Summit Materials
Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the Summit Materials. In addition to that, Sixt Leasing is 1.45 times more volatile than Summit Materials. It trades about -0.04 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.12 per unit of volatility. If you would invest 4,640 in Summit Materials on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Summit Materials or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. Summit Materials
Performance |
| Timeline |
| Sixt Leasing SE |
| Summit Materials |
Sixt Leasing and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and Summit Materials
The main advantage of trading using opposite Sixt Leasing and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |