Correlation Between Dow Jones and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Siemens Healthineers AG, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Siemens Healthineers.
Diversification Opportunities for Dow Jones and Siemens Healthineers
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Siemens is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Dow Jones and Siemens Healthineers
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.55 times more return on investment than Siemens Healthineers. However, Dow Jones Industrial is 1.83 times less risky than Siemens Healthineers. It trades about 0.37 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.18 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Siemens Healthineers AG
Performance |
| Timeline |
Dow Jones and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Siemens Healthineers AG
Pair trading matchups for Siemens Healthineers
Pair Trading with Dow Jones and Siemens Healthineers
The main advantage of trading using opposite Dow Jones and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Siemens Healthineers vs. Stryker | Siemens Healthineers vs. Superior Plus Corp | Siemens Healthineers vs. NMI Holdings | Siemens Healthineers vs. Origin Agritech |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |