Correlation Between Sixt SE and NTG Nordic

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

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

Diversification Opportunities for Sixt SE and NTG Nordic

-0.37

Correlation Coefficient

Sixt SE  NTG Nordic

Very good diversification

The 3 months correlation between Sixt and NTG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Sixt SE i.e., Sixt SE and NTG Nordic go up and down completely randomly.

Pair Corralation between Sixt SE and NTG Nordic

Assuming the 90 days trading horizon Sixt SE is expected to generate 4.03 times less return on investment than NTG Nordic. But when comparing it to its historical volatility, Sixt SE is 1.18 times less risky than NTG Nordic. It trades about 0.02 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,435  in NTG Nordic Transport on December 28, 2024 and sell it today you would earn a total of  245.00  from holding NTG Nordic Transport or generate 7.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Sixt SE  vs.  NTG Nordic Transport

Sixt SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

NTG Nordic Transport

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NTG Nordic Transport are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NTG Nordic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sixt SE and NTG Nordic

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

The idea behind Sixt SE and NTG Nordic Transport 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.