Correlation Between ITALIAN WINE and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Siemens Aktiengesellscha.
Diversification Opportunities for ITALIAN WINE and Siemens Aktiengesellscha
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITALIAN and Siemens is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Siemens Aktiengesellscha
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Siemens Aktiengesellscha. In addition to that, ITALIAN WINE is 1.41 times more volatile than Siemens Aktiengesellschaft. It trades about -0.01 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.06 per unit of volatility. If you would invest 12,475 in Siemens Aktiengesellschaft on September 4, 2024 and sell it today you would earn a total of 5,889 from holding Siemens Aktiengesellschaft or generate 47.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Siemens Aktiengesellscha |
ITALIAN WINE and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Siemens Aktiengesellscha
The main advantage of trading using opposite ITALIAN WINE and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
| Siemens Aktiengesellscha vs. Live Nation Entertainment | Siemens Aktiengesellscha vs. TOWNSQUARE MEDIA INC | Siemens Aktiengesellscha vs. Townsquare Media | Siemens Aktiengesellscha vs. Beijing Media |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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