Correlation Between Siemens Energy and TRAVEL LEISURE
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and TRAVEL LEISURE 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 Siemens Energy and TRAVEL LEISURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Energy AG and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Siemens Energy and TRAVEL LEISURE 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 Siemens Energy with a short position of TRAVEL LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and TRAVEL LEISURE.
Diversification Opportunities for Siemens Energy and TRAVEL LEISURE
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siemens and TRAVEL is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and Siemens Energy 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 Siemens Energy AG are associated (or correlated) with TRAVEL LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Siemens Energy i.e., Siemens Energy and TRAVEL LEISURE go up and down completely randomly.
Pair Corralation between Siemens Energy and TRAVEL LEISURE
Assuming the 90 days horizon Siemens Energy AG is expected to generate 1.93 times more return on investment than TRAVEL LEISURE. However, Siemens Energy is 1.93 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.31 of its potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.04 per unit of risk. If you would invest 4,310 in Siemens Energy AG on September 13, 2024 and sell it today you would earn a total of 790.00 from holding Siemens Energy AG or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Energy AG vs. TRAVEL LEISURE DL 01
Performance |
| Timeline |
| Siemens Energy AG |
| TRAVEL LEISURE DL |
Siemens Energy and TRAVEL LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and TRAVEL LEISURE
The main advantage of trading using opposite Siemens Energy and TRAVEL LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, TRAVEL LEISURE 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 TRAVEL LEISURE will offset losses from the drop in TRAVEL LEISURE's long position.| Siemens Energy vs. Tyson Foods | Siemens Energy vs. Postal Savings Bank | Siemens Energy vs. REGAL ASIAN INVESTMENTS | Siemens Energy vs. Lifeway Foods |
| TRAVEL LEISURE vs. ACCSYS TECHPLC EO | TRAVEL LEISURE vs. Hanison Construction Holdings | TRAVEL LEISURE vs. Hitachi Construction Machinery | TRAVEL LEISURE vs. TITAN MACHINERY |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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