Correlation Between Sixt Leasing and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on Sixt Leasing and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and Volkswagen.
Diversification Opportunities for Sixt Leasing and Volkswagen
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and Volkswagen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Volkswagen go up and down completely randomly.
Pair Corralation between Sixt Leasing and Volkswagen
Assuming the 90 days trading horizon Sixt Leasing SE is expected to generate 0.7 times more return on investment than Volkswagen. However, Sixt Leasing SE is 1.43 times less risky than Volkswagen. It trades about -0.05 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.04 per unit of risk. If you would invest 1,150 in Sixt Leasing SE on October 16, 2024 and sell it today you would lose (235.00) from holding Sixt Leasing SE or give up 20.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. Volkswagen AG
Performance |
| Timeline |
| Sixt Leasing SE |
| Volkswagen AG |
Sixt Leasing and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and Volkswagen
The main advantage of trading using opposite Sixt Leasing and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Sixt Leasing vs. GLOBUS MEDICAL A | Sixt Leasing vs. Sch Environnement SA | Sixt Leasing vs. Xiwang Special Steel | Sixt Leasing vs. ANGANG STEEL H |
| Volkswagen vs. Northern Data AG | Volkswagen vs. Automatic Data Processing | Volkswagen vs. China Datang | Volkswagen vs. Sixt Leasing SE |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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