Correlation Between T MOBILE and Sixt Leasing

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

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

Diversification Opportunities for T MOBILE and Sixt Leasing

-0.84

Correlation Coefficient

T MOBILE  Sixt Leasing

Pay attention - limited upside

The 3 months correlation between TM5 and Sixt is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE and T MOBILE 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 T MOBILE US are associated (or correlated) with Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of T MOBILE i.e., T MOBILE and Sixt Leasing go up and down completely randomly.

Pair Corralation between T MOBILE and Sixt Leasing

Assuming the 90 days trading horizon T MOBILE US is expected to under-perform the Sixt Leasing. But the stock apears to be less risky and, when comparing its historical volatility, T MOBILE US is 1.22 times less risky than Sixt Leasing. The stock trades about -0.2 of its potential returns per unit of risk. The Sixt Leasing SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Sixt Leasing SE on September 23, 2024 and sell it today you would earn a total of  25.00  from holding Sixt Leasing SE or generate 2.7% return on investment over 90 days.

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

T MOBILE US  vs.  Sixt Leasing SE

T MOBILE US

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sixt Leasing SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sixt Leasing SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sixt Leasing is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T MOBILE and Sixt Leasing

The main advantage of trading using opposite T MOBILE and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T MOBILE position performs unexpectedly, Sixt Leasing 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 Leasing will offset losses from the drop in Sixt Leasing's long position.

The idea behind T MOBILE US and Sixt Leasing 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.