Correlation Between InPlay Oil and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Siemens Healthineers 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 InPlay Oil and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Siemens Healthineers AG, you can compare the effects of market volatilities on InPlay Oil and Siemens Healthineers 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 InPlay Oil with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Siemens Healthineers.
Diversification Opportunities for InPlay Oil and Siemens Healthineers
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InPlay and Siemens is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of InPlay Oil i.e., InPlay Oil and Siemens Healthineers go up and down completely randomly.
Pair Corralation between InPlay Oil and Siemens Healthineers
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Siemens Healthineers. In addition to that, InPlay Oil is 2.05 times more volatile than Siemens Healthineers AG. It trades about -0.05 of its total potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.1 per unit of volatility. If you would invest 5,114 in Siemens Healthineers AG on November 6, 2024 and sell it today you would earn a total of 372.00 from holding Siemens Healthineers AG or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Siemens Healthineers AG
Performance |
| Timeline |
| InPlay Oil Corp |
| Siemens Healthineers |
InPlay Oil and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Siemens Healthineers
The main advantage of trading using opposite InPlay Oil and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.| InPlay Oil vs. CITIC Telecom International | InPlay Oil vs. TROPHY GAMES DEV | InPlay Oil vs. Boyd Gaming | InPlay Oil vs. COMBA TELECOM SYST |
| Siemens Healthineers vs. SILICON LABORATOR | Siemens Healthineers vs. Mitsui Chemicals | Siemens Healthineers vs. SIEM OFFSHORE NEW | Siemens Healthineers vs. BW OFFSHORE LTD |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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