Correlation Between USWE SPORTS and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and Siemens Healthineers AG, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Siemens Healthineers.
Diversification Opportunities for USWE SPORTS and Siemens Healthineers
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between USWE and Siemens is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and Siemens Healthineers go up and down completely randomly.
Pair Corralation between USWE SPORTS and Siemens Healthineers
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.77 times more return on investment than Siemens Healthineers. However, USWE SPORTS is 1.77 times more volatile than Siemens Healthineers AG. It trades about 0.12 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.1 per unit of risk. If you would invest 74.00 in USWE SPORTS AB on November 6, 2024 and sell it today you would earn a total of 11.00 from holding USWE SPORTS AB or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Siemens Healthineers AG
Performance |
| Timeline |
| USWE SPORTS AB |
| Siemens Healthineers |
USWE SPORTS and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Siemens Healthineers
The main advantage of trading using opposite USWE SPORTS and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. PROSIEBENSAT1 MEDIADR4 | USWE SPORTS vs. GigaMedia | USWE SPORTS vs. ZINC MEDIA GR | USWE SPORTS vs. Fuji Media Holdings |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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