Correlation Between RATIONAL Aktiengesellscha and SIEMENS AG
Can any of the company-specific risk be diversified away by investing in both RATIONAL Aktiengesellscha and SIEMENS AG 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 RATIONAL Aktiengesellscha and SIEMENS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATIONAL Aktiengesellschaft and SIEMENS AG SP, you can compare the effects of market volatilities on RATIONAL Aktiengesellscha and SIEMENS AG 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 RATIONAL Aktiengesellscha with a short position of SIEMENS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATIONAL Aktiengesellscha and SIEMENS AG.
Diversification Opportunities for RATIONAL Aktiengesellscha and SIEMENS AG
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RATIONAL and SIEMENS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding RATIONAL Aktiengesellschaft and SIEMENS AG SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS AG SP and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft are associated (or correlated) with SIEMENS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS AG SP has no effect on the direction of RATIONAL Aktiengesellscha i.e., RATIONAL Aktiengesellscha and SIEMENS AG go up and down completely randomly.
Pair Corralation between RATIONAL Aktiengesellscha and SIEMENS AG
Assuming the 90 days trading horizon RATIONAL Aktiengesellschaft is expected to under-perform the SIEMENS AG. But the stock apears to be less risky and, when comparing its historical volatility, RATIONAL Aktiengesellschaft is 1.62 times less risky than SIEMENS AG. The stock trades about -0.28 of its potential returns per unit of risk. The SIEMENS AG SP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,850 in SIEMENS AG SP on September 26, 2024 and sell it today you would earn a total of 500.00 from holding SIEMENS AG SP or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RATIONAL Aktiengesellschaft vs. SIEMENS AG SP
Performance |
| Timeline |
| RATIONAL Aktiengesellscha |
| SIEMENS AG SP |
RATIONAL Aktiengesellscha and SIEMENS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RATIONAL Aktiengesellscha and SIEMENS AG
The main advantage of trading using opposite RATIONAL Aktiengesellscha and SIEMENS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATIONAL Aktiengesellscha position performs unexpectedly, SIEMENS AG 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 AG will offset losses from the drop in SIEMENS AG's long position.| RATIONAL Aktiengesellscha vs. SIEMENS AG SP | RATIONAL Aktiengesellscha vs. Siemens Aktiengesellschaft | RATIONAL Aktiengesellscha vs. Schneider Electric SE | RATIONAL Aktiengesellscha vs. Atlas Copco A |
| SIEMENS AG vs. Siemens Aktiengesellschaft | SIEMENS AG vs. Schneider Electric SE | SIEMENS AG vs. Atlas Copco A | SIEMENS AG vs. RATIONAL Aktiengesellschaft |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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