Correlation Between Ballard Power and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Ballard Power and Siemens Energy 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 Ballard Power and Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and Siemens Energy AG, you can compare the effects of market volatilities on Ballard Power and Siemens Energy 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 Ballard Power with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Siemens Energy.
Diversification Opportunities for Ballard Power and Siemens Energy
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ballard and Siemens is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG and Ballard Power 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 Ballard Power Systems are associated (or correlated) with Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Ballard Power i.e., Ballard Power and Siemens Energy go up and down completely randomly.
Pair Corralation between Ballard Power and Siemens Energy
Given the investment horizon of 90 days Ballard Power Systems is expected to under-perform the Siemens Energy. In addition to that, Ballard Power is 1.86 times more volatile than Siemens Energy AG. It trades about -0.04 of its total potential returns per unit of risk. Siemens Energy AG is currently generating about 0.34 per unit of volatility. If you would invest 4,150 in Siemens Energy AG on August 31, 2024 and sell it today you would earn a total of 1,008 from holding Siemens Energy AG or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ballard Power Systems vs. Siemens Energy AG
Performance |
| Timeline |
| Ballard Power Systems |
| Siemens Energy AG |
Ballard Power and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and Siemens Energy
The main advantage of trading using opposite Ballard Power and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power position performs unexpectedly, Siemens Energy 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 Energy will offset losses from the drop in Siemens Energy's long position.| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
| Siemens Energy vs. Schneider Electric SE | Siemens Energy vs. Vestas Wind Systems | Siemens Energy vs. Hillenbrand | Siemens Energy vs. Generac Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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