Correlation Between Siemens Healthineers and De Grey
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and De Grey 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 De Grey 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 De Grey Mining, you can compare the effects of market volatilities on Siemens Healthineers and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and De Grey.
Diversification Opportunities for Siemens Healthineers and De Grey
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and DGD is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining 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 De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and De Grey go up and down completely randomly.
Pair Corralation between Siemens Healthineers and De Grey
Assuming the 90 days horizon Siemens Healthineers is expected to generate 6.1 times less return on investment than De Grey. But when comparing it to its historical volatility, Siemens Healthineers AG is 2.84 times less risky than De Grey. It trades about 0.06 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 67.00 in De Grey Mining on November 3, 2024 and sell it today you would earn a total of 52.00 from holding De Grey Mining or generate 77.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. De Grey Mining
Performance |
| Timeline |
| Siemens Healthineers |
| De Grey Mining |
Siemens Healthineers and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and De Grey
The main advantage of trading using opposite Siemens Healthineers and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| Siemens Healthineers vs. COSMOSTEEL HLDGS | Siemens Healthineers vs. DENTSPLY SIRONA | Siemens Healthineers vs. Daito Trust Construction | Siemens Healthineers vs. ANGANG STEEL H |
| De Grey vs. DENTSPLY SIRONA | De Grey vs. Olympic Steel | De Grey vs. JAPAN AIRLINES | De Grey vs. United Airlines Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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