Correlation Between Sixt Leasing and HK Electric
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on Sixt Leasing and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and HK Electric.
Diversification Opportunities for Sixt Leasing and HK Electric
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sixt and HKT is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and HK Electric go up and down completely randomly.
Pair Corralation between Sixt Leasing and HK Electric
Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the HK Electric. But the stock apears to be less risky and, when comparing its historical volatility, Sixt Leasing SE is 2.0 times less risky than HK Electric. The stock trades about -0.02 of its potential returns per unit of risk. The HK Electric Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 |
Sixt Leasing SE vs. HK Electric Investments
Performance |
| Timeline |
| Sixt Leasing SE |
| HK Electric Investments |
Sixt Leasing and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and HK Electric
The main advantage of trading using opposite Sixt Leasing and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Sixt Leasing vs. Nippon Steel | Sixt Leasing vs. Motorcar Parts of | Sixt Leasing vs. CARSALESCOM | Sixt Leasing vs. Commercial Vehicle Group |
| HK Electric vs. Vishay Intertechnology | HK Electric vs. STRAYER EDUCATION | HK Electric vs. Xinhua Winshare Publishing | HK Electric vs. UPDATE SOFTWARE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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