Correlation Between Sixt SE and HEINEKEN
Can any of the company-specific risk be diversified away by investing in both Sixt SE and HEINEKEN 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 HEINEKEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt SE and HEINEKEN SP ADR, you can compare the effects of market volatilities on Sixt SE and HEINEKEN 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 HEINEKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt SE and HEINEKEN.
Diversification Opportunities for Sixt SE and HEINEKEN
Excellent diversification
The 3 months correlation between Sixt and HEINEKEN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and HEINEKEN SP ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEINEKEN SP ADR 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 HEINEKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEINEKEN SP ADR has no effect on the direction of Sixt SE i.e., Sixt SE and HEINEKEN go up and down completely randomly.
Pair Corralation between Sixt SE and HEINEKEN
Assuming the 90 days trading horizon Sixt SE is expected to generate 2.43 times more return on investment than HEINEKEN. However, Sixt SE is 2.43 times more volatile than HEINEKEN SP ADR. It trades about -0.06 of its potential returns per unit of risk. HEINEKEN SP ADR is currently generating about -0.36 per unit of risk. If you would invest 7,300 in Sixt SE on September 1, 2024 and sell it today you would lose (310.00) from holding Sixt SE or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sixt SE vs. HEINEKEN SP ADR
Performance |
| Timeline |
| Sixt SE |
| HEINEKEN SP ADR |
Sixt SE and HEINEKEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt SE and HEINEKEN
The main advantage of trading using opposite Sixt SE and HEINEKEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt SE position performs unexpectedly, HEINEKEN 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 HEINEKEN will offset losses from the drop in HEINEKEN's long position.| Sixt SE vs. United Rentals | Sixt SE vs. Superior Plus Corp | Sixt SE vs. NMI Holdings | Sixt SE vs. Origin Agritech |
| HEINEKEN vs. INDOFOOD AGRI RES | HEINEKEN vs. Cleanaway Waste Management | HEINEKEN vs. Beyond Meat | HEINEKEN vs. AUSNUTRIA DAIRY |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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