Correlation Between Siemens Energy and SIEMENS AG
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and SIEMENS AG 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 SIEMENS AG 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 SIEMENS AG SP, you can compare the effects of market volatilities on Siemens Energy and SIEMENS AG 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 SIEMENS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and SIEMENS AG.
Diversification Opportunities for Siemens Energy and SIEMENS AG
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siemens and SIEMENS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and SIEMENS AG SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS AG SP 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 SIEMENS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS AG SP has no effect on the direction of Siemens Energy i.e., Siemens Energy and SIEMENS AG go up and down completely randomly.
Pair Corralation between Siemens Energy and SIEMENS AG
Assuming the 90 days trading horizon Siemens Energy AG is expected to generate 1.93 times more return on investment than SIEMENS AG. However, Siemens Energy is 1.93 times more volatile than SIEMENS AG SP. It trades about 0.07 of its potential returns per unit of risk. SIEMENS AG SP is currently generating about 0.05 per unit of risk. If you would invest 1,903 in Siemens Energy AG on October 13, 2024 and sell it today you would earn a total of 3,047 from holding Siemens Energy AG or generate 160.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Energy AG vs. SIEMENS AG SP
Performance |
| Timeline |
| Siemens Energy AG |
| SIEMENS AG SP |
Siemens Energy and SIEMENS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and SIEMENS AG
The main advantage of trading using opposite Siemens Energy and SIEMENS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, SIEMENS AG 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 AG will offset losses from the drop in SIEMENS AG's long position.| Siemens Energy vs. Air New Zealand | Siemens Energy vs. CHINA SOUTHN AIR H | Siemens Energy vs. SYSTEMAIR AB | Siemens Energy vs. Westinghouse Air Brake |
| SIEMENS AG vs. CALTAGIRONE EDITORE | SIEMENS AG vs. Sch Environnement SA | SIEMENS AG vs. BG Foods | SIEMENS AG vs. Tianjin Capital Environmental |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |