Correlation Between Sixt Leasing and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on Sixt Leasing and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and China BlueChemical.
Diversification Opportunities for Sixt Leasing and China BlueChemical
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sixt and China is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and China BlueChemical go up and down completely randomly.
Pair Corralation between Sixt Leasing and China BlueChemical
Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the China BlueChemical. But the stock apears to be less risky and, when comparing its historical volatility, Sixt Leasing SE is 2.23 times less risky than China BlueChemical. The stock trades about -0.02 of its potential returns per unit of risk. The China BlueChemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 23.00 in China BlueChemical on October 26, 2024 and sell it today you would earn a total of 4.00 from holding China BlueChemical or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. China BlueChemical
Performance |
| Timeline |
| Sixt Leasing SE |
| China BlueChemical |
Sixt Leasing and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and China BlueChemical
The main advantage of trading using opposite Sixt Leasing and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical's long position.| Sixt Leasing vs. VIRGIN WINES UK | Sixt Leasing vs. SEI INVESTMENTS | Sixt Leasing vs. MidCap Financial Investment | Sixt Leasing vs. ECHO INVESTMENT ZY |
| China BlueChemical vs. Corteva | China BlueChemical vs. Nutrien | China BlueChemical vs. The Mosaic | China BlueChemical vs. CF Industries 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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