Correlation Between PT Hexindo and Sixt SE

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

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

Diversification Opportunities for PT Hexindo and Sixt SE

0.16

Correlation Coefficient

PT Hexindo  Sixt SE

Average diversification

The 3 months correlation between HX1A and Sixt is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Hexindo Adiperkasa and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE and PT Hexindo 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 PT Hexindo Adiperkasa 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 PT Hexindo i.e., PT Hexindo and Sixt SE go up and down completely randomly.

Pair Corralation between PT Hexindo and Sixt SE

Assuming the 90 days trading horizon PT Hexindo Adiperkasa is expected to under-perform the Sixt SE. In addition to that, PT Hexindo is 5.49 times more volatile than Sixt SE. It trades about -0.01 of its total potential returns per unit of risk. Sixt SE is currently generating about 0.32 per unit of volatility. If you would invest  5,500  in Sixt SE on October 11, 2024 and sell it today you would earn a total of  320.00  from holding Sixt SE or generate 5.82% return on investment over 90 days.

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

PT Hexindo Adiperkasa  vs.  Sixt SE

PT Hexindo Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hexindo Adiperkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sixt SE

Risk-Adjusted Performance

3 of 100

Modest

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. Despite nearly stable basic indicators, Sixt SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Hexindo and Sixt SE

The main advantage of trading using opposite PT Hexindo and Sixt SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hexindo 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 PT Hexindo Adiperkasa 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.