Correlation Between National Bank and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both National Bank and Sixt Leasing 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 National Bank and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and Sixt Leasing SE, you can compare the effects of market volatilities on National Bank and Sixt Leasing 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 National Bank with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Sixt Leasing.
Diversification Opportunities for National Bank and Sixt Leasing
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Sixt is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE and National Bank 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 National Bank Holdings are associated (or correlated) with Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of National Bank i.e., National Bank and Sixt Leasing go up and down completely randomly.
Pair Corralation between National Bank and Sixt Leasing
Assuming the 90 days horizon National Bank Holdings is expected to generate 1.41 times more return on investment than Sixt Leasing. However, National Bank is 1.41 times more volatile than Sixt Leasing SE. It trades about 0.03 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.02 per unit of risk. If you would invest 3,809 in National Bank Holdings on August 31, 2024 and sell it today you would earn a total of 691.00 from holding National Bank Holdings or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
National Bank Holdings vs. Sixt Leasing SE
Performance |
| Timeline |
| National Bank Holdings |
| Sixt Leasing SE |
National Bank and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Sixt Leasing
The main advantage of trading using opposite National Bank and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Sixt Leasing 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 Sixt Leasing will offset losses from the drop in Sixt Leasing's long position.| National Bank vs. Fifth Third Bancorp | National Bank vs. Regions Financial | National Bank vs. Superior Plus Corp | National Bank vs. Origin Agritech |
| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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