Correlation Between Sixt SE and United Utilities
Can any of the company-specific risk be diversified away by investing in both Sixt SE and United Utilities 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 United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt SE and United Utilities Group, you can compare the effects of market volatilities on Sixt SE and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt SE and United Utilities.
Diversification Opportunities for Sixt SE and United Utilities
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sixt and United is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Sixt SE i.e., Sixt SE and United Utilities go up and down completely randomly.
Pair Corralation between Sixt SE and United Utilities
Assuming the 90 days trading horizon Sixt SE is expected to under-perform the United Utilities. In addition to that, Sixt SE is 1.51 times more volatile than United Utilities Group. It trades about -0.09 of its total potential returns per unit of risk. United Utilities Group is currently generating about 0.34 per unit of volatility. If you would invest 1,214 in United Utilities Group on September 5, 2024 and sell it today you would earn a total of 146.00 from holding United Utilities Group or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt SE vs. United Utilities Group
Performance |
| Timeline |
| Sixt SE |
| United Utilities |
Sixt SE and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt SE and United Utilities
The main advantage of trading using opposite Sixt SE and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt SE position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Sixt SE vs. United Utilities Group | Sixt SE vs. WIZZ AIR HLDGUNSPADR4 | Sixt SE vs. UNITED UTILITIES GR | Sixt SE vs. Air New Zealand |
| United Utilities vs. Superior Plus Corp | United Utilities vs. NMI Holdings | United Utilities vs. Origin Agritech | United Utilities vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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