Correlation Between Seaboard and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Seaboard and SIEMENS ENERGY 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 Seaboard and SIEMENS ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seaboard and SIEMENS ENERGY AG, you can compare the effects of market volatilities on Seaboard 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 Seaboard with a short position of SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and SIEMENS ENERGY.
Diversification Opportunities for Seaboard and SIEMENS ENERGY
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seaboard and SIEMENS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard 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 Seaboard 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 Seaboard 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 Seaboard i.e., Seaboard and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Seaboard and SIEMENS ENERGY
Assuming the 90 days horizon Seaboard is expected to under-perform the SIEMENS ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Seaboard is 2.34 times less risky than SIEMENS ENERGY. The stock trades about -0.05 of its potential returns per unit of risk. The SIEMENS ENERGY AG is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,080 in SIEMENS ENERGY AG on August 25, 2024 and sell it today you would earn a total of 3,800 from holding SIEMENS ENERGY AG or generate 351.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seaboard vs. SIEMENS ENERGY AG
Performance |
| Timeline |
| Seaboard |
| SIEMENS ENERGY AG |
Seaboard and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seaboard and SIEMENS ENERGY
The main advantage of trading using opposite Seaboard and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard 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.| Seaboard vs. Superior Plus Corp | Seaboard vs. NMI Holdings | Seaboard vs. Origin Agritech | Seaboard vs. SIVERS SEMICONDUCTORS AB |
| SIEMENS ENERGY vs. Datang International Power | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY vs. Origin Agritech | SIEMENS ENERGY vs. Identiv |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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