Correlation Between Sixt Leasing and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES, you can compare the effects of market volatilities on Sixt Leasing and JAPAN AIRLINES 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 JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and JAPAN AIRLINES.
Diversification Opportunities for Sixt Leasing and JAPAN AIRLINES
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sixt and JAPAN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES 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 JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between Sixt Leasing and JAPAN AIRLINES
Assuming the 90 days trading horizon Sixt Leasing SE is expected to generate 1.6 times more return on investment than JAPAN AIRLINES. However, Sixt Leasing is 1.6 times more volatile than JAPAN AIRLINES. It trades about -0.19 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about -0.41 per unit of risk. 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 |
Sixt Leasing SE vs. JAPAN AIRLINES
Performance |
| Timeline |
| Sixt Leasing SE |
| JAPAN AIRLINES |
Sixt Leasing and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and JAPAN AIRLINES
The main advantage of trading using opposite Sixt Leasing and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, JAPAN AIRLINES 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 JAPAN AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| Sixt Leasing vs. SYSTEMAIR AB | Sixt Leasing vs. Entravision Communications | Sixt Leasing vs. FORWARD AIR P | Sixt Leasing vs. Cogent Communications Holdings |
| JAPAN AIRLINES vs. National Beverage Corp | JAPAN AIRLINES vs. INDOFOOD AGRI RES | JAPAN AIRLINES vs. GRIFFIN MINING LTD | JAPAN AIRLINES vs. VIVA WINE GROUP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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