Correlation Between Sixt SE and Air Lease

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

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

Diversification Opportunities for Sixt SE and Air Lease

-0.18

Correlation Coefficient

Sixt SE  Air Lease

Good diversification

The 3 months correlation between Sixt and Air is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Sixt SE i.e., Sixt SE and Air Lease go up and down completely randomly.

Pair Corralation between Sixt SE and Air Lease

Assuming the 90 days trading horizon Sixt SE is expected to generate 2.05 times less return on investment than Air Lease. In addition to that, Sixt SE is 1.05 times more volatile than Air Lease. It trades about 0.09 of its total potential returns per unit of risk. Air Lease is currently generating about 0.18 per unit of volatility. If you would invest  3,902  in Air Lease on October 6, 2024 and sell it today you would earn a total of  738.00  from holding Air Lease or generate 18.91% return on investment over 90 days.

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

Sixt SE  vs.  Air Lease

Sixt SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sixt SE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Air Lease

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sixt SE and Air Lease

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

The idea behind Sixt SE and Air Lease 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.