Correlation Between SIEMENS ENERGY and Pampa Energía
Can any of the company-specific risk be diversified away by investing in both SIEMENS ENERGY and Pampa Energía 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 Pampa Energía 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 Pampa Energa SA, you can compare the effects of market volatilities on SIEMENS ENERGY and Pampa Energía 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 Pampa Energía. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS ENERGY and Pampa Energía.
Diversification Opportunities for SIEMENS ENERGY and Pampa Energía
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SIEMENS and Pampa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS ENERGY AG and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa SA 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 Pampa Energía. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of SIEMENS ENERGY i.e., SIEMENS ENERGY and Pampa Energía go up and down completely randomly.
Pair Corralation between SIEMENS ENERGY and Pampa Energía
Assuming the 90 days trading horizon SIEMENS ENERGY AG is expected to generate 1.23 times more return on investment than Pampa Energía. However, SIEMENS ENERGY is 1.23 times more volatile than Pampa Energa SA. It trades about 0.08 of its potential returns per unit of risk. Pampa Energa SA is currently generating about 0.08 per unit of risk. If you would invest 1,680 in SIEMENS ENERGY AG on August 26, 2024 and sell it today you would earn a total of 3,200 from holding SIEMENS ENERGY AG or generate 190.48% 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. Pampa Energa SA
Performance |
| Timeline |
| SIEMENS ENERGY AG |
| Pampa Energa SA |
SIEMENS ENERGY and Pampa Energía Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEMENS ENERGY and Pampa Energía
The main advantage of trading using opposite SIEMENS ENERGY and Pampa Energía positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEMENS ENERGY position performs unexpectedly, Pampa Energía 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 Pampa Energía will offset losses from the drop in Pampa Energía's long position.| SIEMENS ENERGY vs. Datang International Power | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY vs. Origin Agritech | SIEMENS ENERGY vs. Identiv |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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