Correlation Between Sixt Leasing and LANSON-BCC INH
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and LANSON-BCC INH 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 LANSON-BCC INH 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 LANSON BCC INH EO, you can compare the effects of market volatilities on Sixt Leasing and LANSON-BCC INH 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 LANSON-BCC INH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and LANSON-BCC INH.
Diversification Opportunities for Sixt Leasing and LANSON-BCC INH
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and LANSON-BCC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON-BCC INH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and LANSON-BCC INH go up and down completely randomly.
Pair Corralation between Sixt Leasing and LANSON-BCC INH
Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the LANSON-BCC INH. In addition to that, Sixt Leasing is 1.05 times more volatile than LANSON BCC INH EO. It trades about -0.02 of its total potential returns per unit of risk. LANSON BCC INH EO is currently generating about 0.03 per unit of volatility. If you would invest 3,021 in LANSON BCC INH EO on October 7, 2024 and sell it today you would earn a total of 449.00 from holding LANSON BCC INH EO or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. LANSON BCC INH EO
Performance |
| Timeline |
| Sixt Leasing SE |
| LANSON BCC INH |
Sixt Leasing and LANSON-BCC INH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and LANSON-BCC INH
The main advantage of trading using opposite Sixt Leasing and LANSON-BCC INH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, LANSON-BCC INH 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 LANSON-BCC INH will offset losses from the drop in LANSON-BCC INH's long position.| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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