Correlation Between United Utilities and Sixt SE
Can any of the company-specific risk be diversified away by investing in both United Utilities and Sixt SE 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 Utilities and Sixt SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Sixt SE, you can compare the effects of market volatilities on United Utilities and Sixt SE 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 Utilities with a short position of Sixt SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Sixt SE.
Diversification Opportunities for United Utilities and Sixt SE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Sixt is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE and United Utilities 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 Utilities Group are associated (or correlated) with Sixt SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt SE has no effect on the direction of United Utilities i.e., United Utilities and Sixt SE go up and down completely randomly.
Pair Corralation between United Utilities and Sixt SE
Assuming the 90 days trading horizon United Utilities Group is expected to generate 0.66 times more return on investment than Sixt SE. However, United Utilities Group is 1.51 times less risky than Sixt SE. It trades about 0.34 of its potential returns per unit of risk. Sixt SE is currently generating about -0.09 per unit of risk. 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 |
United Utilities Group vs. Sixt SE
Performance |
| Timeline |
| United Utilities |
| Sixt SE |
United Utilities and Sixt SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Sixt SE
The main advantage of trading using opposite United Utilities and Sixt SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, Sixt SE 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 SE will offset losses from the drop in Sixt SE's long position.| United Utilities vs. Superior Plus Corp | United Utilities vs. NMI Holdings | United Utilities vs. Origin Agritech | United Utilities vs. SIVERS SEMICONDUCTORS AB |
| Sixt SE vs. United Utilities Group | Sixt SE vs. WIZZ AIR HLDGUNSPADR4 | Sixt SE vs. UNITED UTILITIES GR | Sixt SE vs. Air New Zealand |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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