Correlation Between ASSOC BR and Sixt SE

Can any of the company-specific risk be diversified away by investing in both ASSOC BR 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 ASSOC BR and Sixt SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASSOC BR FOODS and Sixt SE, you can compare the effects of market volatilities on ASSOC BR 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 ASSOC BR with a short position of Sixt SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and Sixt SE.

Diversification Opportunities for ASSOC BR and Sixt SE

-0.21

Correlation Coefficient

ASSOC BR  Sixt SE

Very good diversification

The 3 months correlation between ASSOC and Sixt is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE and ASSOC BR 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 ASSOC BR FOODS 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 ASSOC BR i.e., ASSOC BR and Sixt SE go up and down completely randomly.

Pair Corralation between ASSOC BR and Sixt SE

Assuming the 90 days trading horizon ASSOC BR FOODS is expected to generate 0.83 times more return on investment than Sixt SE. However, ASSOC BR FOODS is 1.2 times less risky than Sixt SE. It trades about 0.03 of its potential returns per unit of risk. Sixt SE is currently generating about 0.01 per unit of risk. If you would invest  1,968  in ASSOC BR FOODS on October 21, 2024 and sell it today you would earn a total of  352.00  from holding ASSOC BR FOODS or generate 17.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ASSOC BR FOODS  vs.  Sixt SE

ASSOC BR FOODS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASSOC BR FOODS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sixt SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sixt SE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ASSOC BR and Sixt SE

The main advantage of trading using opposite ASSOC BR and Sixt SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR 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.

The idea behind ASSOC BR FOODS and Sixt SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..