Correlation Between Sixt Leasing and Sovereign Metals

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

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

Diversification Opportunities for Sixt Leasing and Sovereign Metals

0.19

Correlation Coefficient

Sixt Leasing  Sovereign Metals

Average diversification

The 3 months correlation between Sixt and Sovereign is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and Sovereign Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sovereign Metals and Sixt Leasing 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 Leasing SE are associated (or correlated) with Sovereign Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sovereign Metals has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Sovereign Metals go up and down completely randomly.

Pair Corralation between Sixt Leasing and Sovereign Metals

Assuming the 90 days trading horizon Sixt Leasing SE is expected to generate 1.5 times more return on investment than Sovereign Metals. However, Sixt Leasing is 1.5 times more volatile than Sovereign Metals Limited. It trades about 0.03 of its potential returns per unit of risk. Sovereign Metals Limited is currently generating about 0.03 per unit of risk. If you would invest  990.00  in Sixt Leasing SE on April 22, 2025 and sell it today you would earn a total of  20.00  from holding Sixt Leasing SE or generate 2.02% return on investment over 90 days.

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

Sixt Leasing SE  vs.  Sovereign Metals Limited

Sixt Leasing SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt Leasing SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Sixt Leasing may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sovereign Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sovereign Metals Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sovereign Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sixt Leasing and Sovereign Metals

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

The idea behind Sixt Leasing SE and Sovereign Metals Limited 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.