Correlation Between Vestas Wind and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both Vestas Wind 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 Vestas Wind and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestas Wind Systems and Sixt Leasing SE, you can compare the effects of market volatilities on Vestas Wind 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 Vestas Wind with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Sixt Leasing.
Diversification Opportunities for Vestas Wind and Sixt Leasing
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vestas and Sixt is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems 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 Vestas Wind 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 Vestas Wind Systems 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 Vestas Wind i.e., Vestas Wind and Sixt Leasing go up and down completely randomly.
Pair Corralation between Vestas Wind and Sixt Leasing
Assuming the 90 days trading horizon Vestas Wind Systems is expected to under-perform the Sixt Leasing. In addition to that, Vestas Wind is 2.01 times more volatile than Sixt Leasing SE. It trades about -0.15 of its total potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.1 per unit of volatility. If you would invest 1,040 in Sixt Leasing SE on September 3, 2024 and sell it today you would lose (115.00) from holding Sixt Leasing SE or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. Sixt Leasing SE
Performance |
| Timeline |
| Vestas Wind Systems |
| Sixt Leasing SE |
Vestas Wind and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and Sixt Leasing
The main advantage of trading using opposite Vestas Wind and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind 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.| Vestas Wind vs. Sixt Leasing SE | Vestas Wind vs. COMMERCIAL VEHICLE | Vestas Wind vs. Cars Inc | Vestas Wind vs. Diamyd Medical AB |
| Sixt Leasing vs. Harmony Gold Mining | Sixt Leasing vs. Motorcar Parts of | Sixt Leasing vs. Zijin Mining Group | Sixt Leasing vs. Jacquet Metal Service |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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