Correlation Between Sixt SE and Polski Koncern

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

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

Diversification Opportunities for Sixt SE and Polski Koncern

-0.75

Correlation Coefficient

Sixt SE  Polski Koncern

Pay attention - limited upside

The 3 months correlation between Sixt and Polski is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy and Sixt SE 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 SE are associated (or correlated) with Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of Sixt SE i.e., Sixt SE and Polski Koncern go up and down completely randomly.

Pair Corralation between Sixt SE and Polski Koncern

Assuming the 90 days trading horizon Sixt SE is expected to generate 0.58 times more return on investment than Polski Koncern. However, Sixt SE is 1.72 times less risky than Polski Koncern. It trades about 0.07 of its potential returns per unit of risk. Polski Koncern Naftowy is currently generating about 0.01 per unit of risk. If you would invest  6,725  in Sixt SE on October 2, 2024 and sell it today you would earn a total of  1,000.00  from holding Sixt SE or generate 14.87% return on investment over 90 days.

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

Sixt SE  vs.  Polski Koncern Naftowy

Sixt SE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sixt SE reported solid returns over the last few months and may actually be approaching a breakup point.

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polski Koncern Naftowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sixt SE and Polski Koncern

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

The idea behind Sixt SE and Polski Koncern Naftowy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.