Correlation Between DAX Index and Siemens Energy
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By analyzing existing cross correlation between DAX Index and Siemens Energy AG, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Siemens Energy.
Diversification Opportunities for DAX Index and Siemens Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Siemens is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Siemens Energy go up and down completely randomly.
Pair Corralation between DAX Index and Siemens Energy
Assuming the 90 days trading horizon DAX Index is expected to generate 12.49 times less return on investment than Siemens Energy. But when comparing it to its historical volatility, DAX Index is 3.19 times less risky than Siemens Energy. It trades about 0.07 of its potential returns per unit of risk. Siemens Energy AG is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,378 in Siemens Energy AG on September 1, 2024 and sell it today you would earn a total of 3,730 from holding Siemens Energy AG or generate 270.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
DAX Index vs. Siemens Energy AG
Performance |
| Timeline |
DAX Index and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Siemens Energy AG
Pair trading matchups for Siemens Energy
Pair Trading with DAX Index and Siemens Energy
The main advantage of trading using opposite DAX Index and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| Siemens Energy vs. TransAlta | Siemens Energy vs. Superior Plus Corp | Siemens Energy vs. NMI Holdings | Siemens Energy vs. Origin Agritech |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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