Correlation Between LION ONE and SIEMENS HEALTH
Can any of the company-specific risk be diversified away by investing in both LION ONE and SIEMENS HEALTH 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 LION ONE and SIEMENS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and SIEMENS HEALTH ADR050, you can compare the effects of market volatilities on LION ONE and SIEMENS HEALTH 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 LION ONE with a short position of SIEMENS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and SIEMENS HEALTH.
Diversification Opportunities for LION ONE and SIEMENS HEALTH
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between LION and SIEMENS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and SIEMENS HEALTH ADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS HEALTH ADR050 and LION ONE 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 LION ONE METALS are associated (or correlated) with SIEMENS HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS HEALTH ADR050 has no effect on the direction of LION ONE i.e., LION ONE and SIEMENS HEALTH go up and down completely randomly.
Pair Corralation between LION ONE and SIEMENS HEALTH
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the SIEMENS HEALTH. In addition to that, LION ONE is 2.42 times more volatile than SIEMENS HEALTH ADR050. It trades about -0.08 of its total potential returns per unit of risk. SIEMENS HEALTH ADR050 is currently generating about 0.03 per unit of volatility. If you would invest 2,411 in SIEMENS HEALTH ADR050 on September 14, 2024 and sell it today you would earn a total of 249.00 from holding SIEMENS HEALTH ADR050 or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. SIEMENS HEALTH ADR050
Performance |
| Timeline |
| LION ONE METALS |
| SIEMENS HEALTH ADR050 |
LION ONE and SIEMENS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and SIEMENS HEALTH
The main advantage of trading using opposite LION ONE and SIEMENS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, SIEMENS HEALTH 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 HEALTH will offset losses from the drop in SIEMENS HEALTH's long position.The idea behind LION ONE METALS and SIEMENS HEALTH ADR050 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SIEMENS HEALTH vs. LION ONE METALS | SIEMENS HEALTH vs. G8 EDUCATION | SIEMENS HEALTH vs. IMPERIAL TOBACCO | SIEMENS HEALTH vs. GREENX METALS LTD |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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