Correlation Between Sixt Leasing and HMS Bergbau

Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and HMS Bergbau 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 HMS Bergbau 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 HMS Bergbau AG, you can compare the effects of market volatilities on Sixt Leasing and HMS Bergbau 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 HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and HMS Bergbau.

Diversification Opportunities for Sixt Leasing and HMS Bergbau

-0.32

Correlation Coefficient

Sixt Leasing  HMS Bergbau

Very good diversification

The 3 months correlation between Sixt and HMS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and HMS Bergbau go up and down completely randomly.

Pair Corralation between Sixt Leasing and HMS Bergbau

Assuming the 90 days trading horizon Sixt Leasing is expected to generate 4.12 times less return on investment than HMS Bergbau. But when comparing it to its historical volatility, Sixt Leasing SE is 1.35 times less risky than HMS Bergbau. It trades about 0.03 of its potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,940  in HMS Bergbau AG on December 22, 2024 and sell it today you would earn a total of  400.00  from holding HMS Bergbau AG or generate 13.61% return on investment over 90 days.

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

Sixt Leasing SE  vs.  HMS Bergbau AG

Sixt Leasing SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt Leasing SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sixt Leasing is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

HMS Bergbau AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HMS Bergbau AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, HMS Bergbau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sixt Leasing and HMS Bergbau

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

The idea behind Sixt Leasing SE and HMS Bergbau AG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.