Correlation Between Sixt Leasing and Boston Beer

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

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

Diversification Opportunities for Sixt Leasing and Boston Beer

-0.86

Correlation Coefficient

Sixt Leasing  Boston Beer

Pay attention - limited upside

The 3 months correlation between Sixt and Boston is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Sixt Leasing 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 Sixt Leasing SE are associated (or correlated) with Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Boston Beer go up and down completely randomly.

Pair Corralation between Sixt Leasing and Boston Beer

Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the Boston Beer. But the stock apears to be less risky and, when comparing its historical volatility, Sixt Leasing SE is 1.33 times less risky than Boston Beer. The stock trades about -0.03 of its potential returns per unit of risk. The The Boston Beer is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  29,790  in The Boston Beer on October 5, 2024 and sell it today you would lose (730.00) from holding The Boston Beer or give up 2.45% of portfolio value over 90 days.

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

Sixt Leasing SE  vs.  The Boston Beer

Sixt Leasing SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sixt Leasing SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Boston Beer

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days The Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, Boston Beer reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sixt Leasing and Boston Beer

The main advantage of trading using opposite Sixt Leasing and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.

The idea behind Sixt Leasing SE and The Boston Beer 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.