Correlation Between Sixt SE and Controladora Vuela
Can any of the company-specific risk be diversified away by investing in both Sixt SE and Controladora Vuela 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 Controladora Vuela into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt SE and Controladora Vuela Compaa, you can compare the effects of market volatilities on Sixt SE and Controladora Vuela 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 Controladora Vuela. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt SE and Controladora Vuela.
Diversification Opportunities for Sixt SE and Controladora Vuela
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and Controladora is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and Controladora Vuela Compaa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Controladora Vuela Compaa 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 Controladora Vuela. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Controladora Vuela Compaa has no effect on the direction of Sixt SE i.e., Sixt SE and Controladora Vuela go up and down completely randomly.
Pair Corralation between Sixt SE and Controladora Vuela
Assuming the 90 days trading horizon Sixt SE is expected to generate 2.12 times less return on investment than Controladora Vuela. In addition to that, Sixt SE is 1.11 times more volatile than Controladora Vuela Compaa. It trades about 0.07 of its total potential returns per unit of risk. Controladora Vuela Compaa is currently generating about 0.17 per unit of volatility. If you would invest 660.00 in Controladora Vuela Compaa on September 23, 2024 and sell it today you would earn a total of 95.00 from holding Controladora Vuela Compaa or generate 14.39% 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. Controladora Vuela Compaa
Performance |
| Timeline |
| Sixt SE |
| Controladora Vuela Compaa |
Sixt SE and Controladora Vuela Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt SE and Controladora Vuela
The main advantage of trading using opposite Sixt SE and Controladora Vuela positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt SE position performs unexpectedly, Controladora Vuela 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 Controladora Vuela will offset losses from the drop in Controladora Vuela's long position.| Sixt SE vs. Ashtead Group plc | Sixt SE vs. WillScot Mobile Mini | Sixt SE vs. Avis Budget Group | Sixt SE vs. Sixt SE |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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