Correlation Between North American and Sixt SE

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

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

Diversification Opportunities for North American and Sixt SE

0.0

Correlation Coefficient

North American  Sixt SE

Pay attention - limited upside

The 3 months correlation between North and Sixt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE and North American 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 North American Construction 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 North American i.e., North American and Sixt SE go up and down completely randomly.

Pair Corralation between North American and Sixt SE

If you would invest (100.00) in Sixt SE on October 26, 2024 and sell it today you would earn a total of  100.00  from holding Sixt SE or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

North American Construction  vs.  Sixt SE

North American Const

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in North American Construction are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, North American reported solid returns over the last few months and may actually be approaching a breakup point.

Sixt SE

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Sixt SE has generated negative risk-adjusted returns adding no value to investors with long positions. 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 North American and Sixt SE

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

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.