Correlation Between FARM 51 and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both FARM 51 and Siemens Aktiengesellscha 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 FARM 51 and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on FARM 51 and Siemens Aktiengesellscha 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 FARM 51 with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Siemens Aktiengesellscha.
Diversification Opportunities for FARM 51 and Siemens Aktiengesellscha
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FARM and Siemens is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and FARM 51 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 FARM 51 GROUP are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of FARM 51 i.e., FARM 51 and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between FARM 51 and Siemens Aktiengesellscha
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 2.02 times more return on investment than Siemens Aktiengesellscha. However, FARM 51 is 2.02 times more volatile than Siemens Aktiengesellschaft. It trades about 0.19 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.15 per unit of risk. If you would invest 290.00 in FARM 51 GROUP on November 7, 2024 and sell it today you would earn a total of 36.00 from holding FARM 51 GROUP or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| FARM 51 GROUP |
| Siemens Aktiengesellscha |
FARM 51 and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Siemens Aktiengesellscha
The main advantage of trading using opposite FARM 51 and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, Siemens Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| FARM 51 vs. Suntory Beverage Food | FARM 51 vs. United Breweries Co | FARM 51 vs. International Consolidated Airlines | FARM 51 vs. United Airlines Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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