Correlation Between Shenandoah Telecommunicatio and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio and Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and Siemens Energy AG, you can compare the effects of market volatilities on Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and Siemens Energy.
Diversification Opportunities for Shenandoah Telecommunicatio and Siemens Energy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenandoah and Siemens is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications 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 Shenandoah Telecommunicatio 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 Shenandoah Telecommunications 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 Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and Siemens Energy go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and Siemens Energy
Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the Siemens Energy. In addition to that, Shenandoah Telecommunicatio is 1.28 times more volatile than Siemens Energy AG. It trades about -0.08 of its total potential returns per unit of risk. Siemens Energy AG is currently generating about 0.26 per unit of volatility. If you would invest 2,359 in Siemens Energy AG on November 3, 2024 and sell it today you would earn a total of 3,363 from holding Siemens Energy AG or generate 142.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenandoah Telecommunications vs. Siemens Energy AG
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| Siemens Energy AG |
Shenandoah Telecommunicatio and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and Siemens Energy
The main advantage of trading using opposite Shenandoah Telecommunicatio and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio 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.| Shenandoah Telecommunicatio vs. KENEDIX OFFICE INV | Shenandoah Telecommunicatio vs. Virtu Financial | Shenandoah Telecommunicatio vs. Sun Life Financial | Shenandoah Telecommunicatio vs. Chiba Bank |
| Siemens Energy vs. Kingdee International Software | Siemens Energy vs. Khiron Life Sciences | Siemens Energy vs. Check Point Software | Siemens Energy vs. Mount Gibson Iron |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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