Correlation Between United Internet and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both United Internet and Sixt Leasing 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 United Internet and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and Sixt Leasing SE, you can compare the effects of market volatilities on United Internet and Sixt Leasing 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 United Internet with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Sixt Leasing.
Diversification Opportunities for United Internet and Sixt Leasing
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Sixt is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE and United Internet 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 United Internet AG are associated (or correlated) with Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of United Internet i.e., United Internet and Sixt Leasing go up and down completely randomly.
Pair Corralation between United Internet and Sixt Leasing
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the Sixt Leasing. But the stock apears to be less risky and, when comparing its historical volatility, United Internet AG is 1.84 times less risky than Sixt Leasing. The stock trades about -0.12 of its potential returns per unit of risk. The Sixt Leasing SE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 920.00 in Sixt Leasing SE on September 25, 2024 and sell it today you would earn a total of 20.00 from holding Sixt Leasing SE or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Sixt Leasing SE
Performance |
| Timeline |
| United Internet AG |
| Sixt Leasing SE |
United Internet and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Sixt Leasing
The main advantage of trading using opposite United Internet and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Sixt Leasing 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 Sixt Leasing will offset losses from the drop in Sixt Leasing's long position.| United Internet vs. T Mobile | United Internet vs. ATT Inc | United Internet vs. ATT Inc | United Internet vs. Deutsche Telekom AG |
| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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