Correlation Between Siemens Healthineers and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Universal Insurance 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 Universal Insurance 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 Universal Insurance Holdings, you can compare the effects of market volatilities on Siemens Healthineers and Universal Insurance 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 Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Universal Insurance.
Diversification Opportunities for Siemens Healthineers and Universal Insurance
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siemens and Universal is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance 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 Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Universal Insurance go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Universal Insurance
Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.82 times more return on investment than Universal Insurance. However, Siemens Healthineers AG is 1.22 times less risky than Universal Insurance. It trades about 0.19 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about -0.09 per unit of risk. If you would invest 5,212 in Siemens Healthineers AG on November 7, 2024 and sell it today you would earn a total of 274.00 from holding Siemens Healthineers AG or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Universal Insurance Holdings
Performance |
| Timeline |
| Siemens Healthineers |
| Universal Insurance |
Siemens Healthineers and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Universal Insurance
The main advantage of trading using opposite Siemens Healthineers and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Universal Insurance 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| Siemens Healthineers vs. SILICON LABORATOR | Siemens Healthineers vs. Mitsui Chemicals | Siemens Healthineers vs. SIEM OFFSHORE NEW | Siemens Healthineers vs. BW OFFSHORE LTD |
| Universal Insurance vs. MeVis Medical Solutions | Universal Insurance vs. Agilent Technologies | Universal Insurance vs. Advanced Medical Solutions | Universal Insurance vs. IMAGIN MEDICAL INC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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