Correlation Between Sixt SE and Legend Holdings
Can any of the company-specific risk be diversified away by investing in both Sixt SE and Legend Holdings 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 SE and Legend Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt SE and Legend Holdings, you can compare the effects of market volatilities on Sixt SE and Legend Holdings 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 SE with a short position of Legend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt SE and Legend Holdings.
Diversification Opportunities for Sixt SE and Legend Holdings
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and Legend is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and Legend Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Holdings and Sixt SE 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 SE are associated (or correlated) with Legend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Holdings has no effect on the direction of Sixt SE i.e., Sixt SE and Legend Holdings go up and down completely randomly.
Pair Corralation between Sixt SE and Legend Holdings
Assuming the 90 days trading horizon Sixt SE is expected to generate 2.81 times less return on investment than Legend Holdings. But when comparing it to its historical volatility, Sixt SE is 1.81 times less risky than Legend Holdings. It trades about 0.09 of its potential returns per unit of risk. Legend Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Legend Holdings on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Legend Holdings or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt SE vs. Legend Holdings
Performance |
| Timeline |
| Sixt SE |
| Legend Holdings |
Sixt SE and Legend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt SE and Legend Holdings
The main advantage of trading using opposite Sixt SE and Legend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt SE position performs unexpectedly, Legend Holdings 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 Legend Holdings will offset losses from the drop in Legend Holdings' long position.| Sixt SE vs. Superior Plus Corp | Sixt SE vs. NMI Holdings | Sixt SE vs. Origin Agritech | Sixt SE vs. SIVERS SEMICONDUCTORS AB |
| Legend Holdings vs. MI Homes | Legend Holdings vs. Addus HomeCare | Legend Holdings vs. ON SEMICONDUCTOR | Legend Holdings vs. Taylor Morrison Home |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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