Correlation Between SIEMENS ENERGY and TransAlta
Can any of the company-specific risk be diversified away by investing in both SIEMENS ENERGY and TransAlta 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 TransAlta 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 TransAlta, you can compare the effects of market volatilities on SIEMENS ENERGY and TransAlta 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 TransAlta. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS ENERGY and TransAlta.
Diversification Opportunities for SIEMENS ENERGY and TransAlta
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIEMENS and TransAlta is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS ENERGY AG and TransAlta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta 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 TransAlta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta has no effect on the direction of SIEMENS ENERGY i.e., SIEMENS ENERGY and TransAlta go up and down completely randomly.
Pair Corralation between SIEMENS ENERGY and TransAlta
Assuming the 90 days trading horizon SIEMENS ENERGY AG is expected to generate 1.21 times more return on investment than TransAlta. However, SIEMENS ENERGY is 1.21 times more volatile than TransAlta. It trades about 0.19 of its potential returns per unit of risk. TransAlta is currently generating about 0.15 per unit of risk. If you would invest 2,520 in SIEMENS ENERGY AG on August 29, 2024 and sell it today you would earn a total of 2,440 from holding SIEMENS ENERGY AG or generate 96.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEMENS ENERGY AG vs. TransAlta
Performance |
| Timeline |
| SIEMENS ENERGY AG |
| TransAlta |
SIEMENS ENERGY and TransAlta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEMENS ENERGY and TransAlta
The main advantage of trading using opposite SIEMENS ENERGY and TransAlta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEMENS ENERGY position performs unexpectedly, TransAlta 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 TransAlta will offset losses from the drop in TransAlta's long position.| SIEMENS ENERGY vs. CN YANGTPWR GDR | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY vs. SIVERS SEMICONDUCTORS AB | SIEMENS ENERGY vs. Talanx AG |
| TransAlta vs. CN YANGTPWR GDR | TransAlta vs. Superior Plus Corp | TransAlta vs. SIVERS SEMICONDUCTORS AB | TransAlta vs. Talanx AG |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |