Correlation Between Sixt SE and Orient Overseas
Can any of the company-specific risk be diversified away by investing in both Sixt SE and Orient Overseas 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 Orient Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt SE and Orient Overseas Limited, you can compare the effects of market volatilities on Sixt SE and Orient Overseas 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 Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt SE and Orient Overseas.
Diversification Opportunities for Sixt SE and Orient Overseas
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and Orient is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and Orient Overseas Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas 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 Orient Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Overseas has no effect on the direction of Sixt SE i.e., Sixt SE and Orient Overseas go up and down completely randomly.
Pair Corralation between Sixt SE and Orient Overseas
Assuming the 90 days trading horizon Sixt SE is expected to generate 1.32 times more return on investment than Orient Overseas. However, Sixt SE is 1.32 times more volatile than Orient Overseas Limited. It trades about -0.04 of its potential returns per unit of risk. Orient Overseas Limited is currently generating about -0.22 per unit of risk. If you would invest 7,205 in Sixt SE on September 3, 2024 and sell it today you would lose (215.00) from holding Sixt SE or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt SE vs. Orient Overseas Limited
Performance |
| Timeline |
| Sixt SE |
| Orient Overseas |
Sixt SE and Orient Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt SE and Orient Overseas
The main advantage of trading using opposite Sixt SE and Orient Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt SE position performs unexpectedly, Orient Overseas 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 Orient Overseas will offset losses from the drop in Orient Overseas' long position.| Sixt SE vs. REVO INSURANCE SPA | Sixt SE vs. Mobilezone Holding AG | Sixt SE vs. Chunghwa Telecom Co | Sixt SE vs. Cogent Communications Holdings |
| Orient Overseas vs. TSOGO SUN GAMING | Orient Overseas vs. PENN NATL GAMING | Orient Overseas vs. Hochschild Mining plc | Orient Overseas vs. FRACTAL GAMING GROUP |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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