Correlation Between Broadwind and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Broadwind and Siemens Aktiengesellscha 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 Broadwind and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on Broadwind and Siemens Aktiengesellscha 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 Broadwind with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and Siemens Aktiengesellscha.
Diversification Opportunities for Broadwind and Siemens Aktiengesellscha
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadwind and Siemens is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and Broadwind 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 Broadwind are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Broadwind i.e., Broadwind and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between Broadwind and Siemens Aktiengesellscha
Assuming the 90 days trading horizon Broadwind is expected to under-perform the Siemens Aktiengesellscha. In addition to that, Broadwind is 2.49 times more volatile than Siemens Aktiengesellschaft. It trades about -0.03 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.09 per unit of volatility. If you would invest 18,130 in Siemens Aktiengesellschaft on September 4, 2024 and sell it today you would earn a total of 682.00 from holding Siemens Aktiengesellschaft or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Broadwind vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| Broadwind |
| Siemens Aktiengesellscha |
Broadwind and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and Siemens Aktiengesellscha
The main advantage of trading using opposite Broadwind and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind position performs unexpectedly, Siemens Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| Broadwind vs. MINCO SILVER | Broadwind vs. Ming Le Sports | Broadwind vs. GRIFFIN MINING LTD | Broadwind vs. CI GAMES SA |
| Siemens Aktiengesellscha vs. SIEMENS AG SP | Siemens Aktiengesellscha vs. Siemens Aktiengesellschaft | Siemens Aktiengesellscha vs. Atlas Copco A | Siemens Aktiengesellscha vs. Otis Worldwide Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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