Correlation Between Leatt Corp and Six Flags

Can any of the company-specific risk be diversified away by investing in both Leatt Corp and Six Flags 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 Leatt Corp and Six Flags into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Leatt Corp and Six Flags Entertainment, you can compare the effects of market volatilities on Leatt Corp and Six Flags 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 Leatt Corp with a short position of Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatt Corp and Six Flags.

Diversification Opportunities for Leatt Corp and Six Flags

-0.25

Correlation Coefficient

Leatt Corp  Six Flags

Very good diversification

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

Pair Corralation between Leatt Corp and Six Flags

Given the investment horizon of 90 days Leatt Corp is expected to under-perform the Six Flags. In addition to that, Leatt Corp is 1.34 times more volatile than Six Flags Entertainment. It trades about -0.1 of its total potential returns per unit of risk. Six Flags Entertainment is currently generating about 0.05 per unit of volatility. If you would invest  4,391  in Six Flags Entertainment on September 3, 2024 and sell it today you would earn a total of  228.00  from holding Six Flags Entertainment or generate 5.19% return on investment over 90 days.

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

Leatt Corp  vs.  Six Flags Entertainment

Leatt Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leatt Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Six Flags Entertainment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Six Flags may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Leatt Corp and Six Flags

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

The idea behind Leatt Corp and Six Flags Entertainment 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.