Correlation Between Orthofix Medical and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Orthofix Medical and Siemens Healthineers 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 Orthofix Medical and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orthofix Medical and Siemens Healthineers AG, you can compare the effects of market volatilities on Orthofix Medical and Siemens Healthineers 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 Orthofix Medical with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orthofix Medical and Siemens Healthineers.
Diversification Opportunities for Orthofix Medical and Siemens Healthineers
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orthofix and Siemens is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Orthofix Medical 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 Orthofix Medical are associated (or correlated) with Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Orthofix Medical i.e., Orthofix Medical and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Orthofix Medical and Siemens Healthineers
Given the investment horizon of 90 days Orthofix Medical is expected to generate 1.14 times more return on investment than Siemens Healthineers. However, Orthofix Medical is 1.14 times more volatile than Siemens Healthineers AG. It trades about 0.29 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about -0.12 per unit of risk. If you would invest 1,636 in Orthofix Medical on August 30, 2024 and sell it today you would earn a total of 298.00 from holding Orthofix Medical or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orthofix Medical vs. Siemens Healthineers AG
Performance |
| Timeline |
| Orthofix Medical |
| Siemens Healthineers |
Orthofix Medical and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orthofix Medical and Siemens Healthineers
The main advantage of trading using opposite Orthofix Medical and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orthofix Medical position performs unexpectedly, Siemens Healthineers 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 Healthineers will offset losses from the drop in Siemens Healthineers' long position.| Orthofix Medical vs. Globus Medical | Orthofix Medical vs. CONMED | Orthofix Medical vs. Alphatec Holdings | Orthofix Medical vs. LivaNova PLC |
| Siemens Healthineers vs. Artivion | Siemens Healthineers vs. Anika Therapeutics | Siemens Healthineers vs. Sight Sciences | Siemens Healthineers vs. Orthofix Medical |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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