Correlation Between Sixt SE and PT Hexindo

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

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

Diversification Opportunities for Sixt SE and PT Hexindo

-0.25

Correlation Coefficient

Sixt SE  PT Hexindo

Very good diversification

The 3 months correlation between Sixt and HX1A is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sixt SE and PT Hexindo Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hexindo Adiperkasa 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 PT Hexindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hexindo Adiperkasa has no effect on the direction of Sixt SE i.e., Sixt SE and PT Hexindo go up and down completely randomly.

Pair Corralation between Sixt SE and PT Hexindo

Assuming the 90 days trading horizon Sixt SE is expected to generate 0.25 times more return on investment than PT Hexindo. However, Sixt SE is 3.96 times less risky than PT Hexindo. It trades about 0.19 of its potential returns per unit of risk. PT Hexindo Adiperkasa is currently generating about -0.03 per unit of risk. If you would invest  5,450  in Sixt SE on September 23, 2024 and sell it today you would earn a total of  190.00  from holding Sixt SE or generate 3.49% 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.  PT Hexindo Adiperkasa

Sixt SE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Sixt SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Hexindo Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hexindo Adiperkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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 PT Hexindo

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

The idea behind Sixt SE and PT Hexindo Adiperkasa 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.