Correlation Between FAST RETAIL and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL and Siemens Energy 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 FAST RETAIL and Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Siemens Energy AG, you can compare the effects of market volatilities on FAST RETAIL and Siemens Energy 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 FAST RETAIL with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Siemens Energy.
Diversification Opportunities for FAST RETAIL and Siemens Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FAST and Siemens is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG and FAST RETAIL 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 FAST RETAIL ADR are associated (or correlated) with Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of FAST RETAIL i.e., FAST RETAIL and Siemens Energy go up and down completely randomly.
Pair Corralation between FAST RETAIL and Siemens Energy
Assuming the 90 days trading horizon FAST RETAIL is expected to generate 10.45 times less return on investment than Siemens Energy. But when comparing it to its historical volatility, FAST RETAIL ADR is 1.21 times less risky than Siemens Energy. It trades about 0.06 of its potential returns per unit of risk. Siemens Energy AG is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 3,782 in Siemens Energy AG on August 29, 2024 and sell it today you would earn a total of 1,068 from holding Siemens Energy AG or generate 28.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Siemens Energy AG
Performance |
| Timeline |
| FAST RETAIL ADR |
| Siemens Energy AG |
FAST RETAIL and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Siemens Energy
The main advantage of trading using opposite FAST RETAIL and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL position performs unexpectedly, Siemens Energy 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 Energy will offset losses from the drop in Siemens Energy's long position.| FAST RETAIL vs. SIDETRADE EO 1 | FAST RETAIL vs. RETAIL FOOD GROUP | FAST RETAIL vs. China Resources Beer | FAST RETAIL vs. CARSALESCOM |
| Siemens Energy vs. CN YANGTPWR GDR | Siemens Energy vs. Datang International Power | Siemens Energy vs. Superior Plus Corp | Siemens Energy vs. SIVERS SEMICONDUCTORS AB |
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..
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |