Correlation Between Siemens Healthineers and MPH Health
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and MPH Health 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 MPH Health 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 MPH Health Care, you can compare the effects of market volatilities on Siemens Healthineers and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and MPH Health.
Diversification Opportunities for Siemens Healthineers and MPH Health
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siemens and MPH is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and MPH Health go up and down completely randomly.
Pair Corralation between Siemens Healthineers and MPH Health
Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.92 times more return on investment than MPH Health. However, Siemens Healthineers AG is 1.08 times less risky than MPH Health. It trades about 0.24 of its potential returns per unit of risk. MPH Health Care is currently generating about 0.13 per unit of risk. If you would invest 5,136 in Siemens Healthineers AG on October 31, 2024 and sell it today you would earn a total of 306.00 from holding Siemens Healthineers AG or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. MPH Health Care
Performance |
| Timeline |
| Siemens Healthineers |
| MPH Health Care |
Siemens Healthineers and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and MPH Health
The main advantage of trading using opposite Siemens Healthineers and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| Siemens Healthineers vs. Kingdee International Software | Siemens Healthineers vs. FANDIFI TECHNOLOGY P | Siemens Healthineers vs. GBS Software AG | Siemens Healthineers vs. PSI Software AG |
| MPH Health vs. Liberty Broadband | MPH Health vs. ARISTOCRAT LEISURE | MPH Health vs. LG Display Co | MPH Health vs. GOLD ROAD RES |
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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