Correlation Between EHEALTH and Sixt Leasing

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

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

Diversification Opportunities for EHEALTH and Sixt Leasing

-0.34

Correlation Coefficient

EHEALTH  Sixt Leasing

Very good diversification

The 3 months correlation between EHEALTH and Sixt is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH 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 EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and Sixt Leasing go up and down completely randomly.

Pair Corralation between EHEALTH and Sixt Leasing

Assuming the 90 days trading horizon EHEALTH is expected to under-perform the Sixt Leasing. But the stock apears to be less risky and, when comparing its historical volatility, EHEALTH is 1.53 times less risky than Sixt Leasing. The stock trades about -0.36 of its potential returns per unit of risk. The Sixt Leasing SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  915.00  in Sixt Leasing SE on December 30, 2024 and sell it today you would earn a total of  5.00  from holding Sixt Leasing SE or generate 0.55% return on investment over 90 days.

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

EHEALTH  vs.  Sixt Leasing SE

EHEALTH

Risk-Adjusted Performance

Very Weak

Over the last 90 days EHEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 1 (%) 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.

Pair Trading with EHEALTH and Sixt Leasing

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

The idea behind EHEALTH and Sixt Leasing 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.