Correlation Between Siemens Healthineers and Knowles
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Knowles 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 Siemens Healthineers and Knowles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Healthineers AG and Knowles, you can compare the effects of market volatilities on Siemens Healthineers and Knowles 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 Siemens Healthineers with a short position of Knowles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Knowles.
Diversification Opportunities for Siemens Healthineers and Knowles
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siemens and Knowles is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Knowles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles and Siemens Healthineers 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 Siemens Healthineers AG are associated (or correlated) with Knowles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Knowles go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Knowles
Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.75 times more return on investment than Knowles. However, Siemens Healthineers AG is 1.33 times less risky than Knowles. It trades about 0.33 of its potential returns per unit of risk. Knowles is currently generating about -0.19 per unit of risk. If you would invest 5,092 in Siemens Healthineers AG on November 3, 2024 and sell it today you would earn a total of 434.00 from holding Siemens Healthineers AG or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Knowles
Performance |
| Timeline |
| Siemens Healthineers |
| Knowles |
Siemens Healthineers and Knowles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Knowles
The main advantage of trading using opposite Siemens Healthineers and Knowles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Knowles 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 Knowles will offset losses from the drop in Knowles' long position.| Siemens Healthineers vs. SILICON LABORATOR | Siemens Healthineers vs. KINGBOARD CHEMICAL | Siemens Healthineers vs. Tower One Wireless | Siemens Healthineers vs. Siamgas And Petrochemicals |
| Knowles vs. Fast Retailing Co | Knowles vs. Ryanair Holdings plc | Knowles vs. RYANAIR HLDGS ADR | Knowles vs. ALERION CLEANPOWER |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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