Correlation Between Siemens Healthineers and DIeteren Group
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and DIeteren Group 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 DIeteren Group 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 DIeteren Group SA, you can compare the effects of market volatilities on Siemens Healthineers and DIeteren Group 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 DIeteren Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and DIeteren Group.
Diversification Opportunities for Siemens Healthineers and DIeteren Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and DIeteren is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and DIeteren Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIeteren Group SA 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 DIeteren Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIeteren Group SA has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and DIeteren Group go up and down completely randomly.
Pair Corralation between Siemens Healthineers and DIeteren Group
Assuming the 90 days horizon Siemens Healthineers is expected to generate 3.11 times less return on investment than DIeteren Group. But when comparing it to its historical volatility, Siemens Healthineers AG is 2.43 times less risky than DIeteren Group. It trades about 0.1 of its potential returns per unit of risk. DIeteren Group SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 12,901 in DIeteren Group SA on November 6, 2024 and sell it today you would earn a total of 2,979 from holding DIeteren Group SA or generate 23.09% 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. DIeteren Group SA
Performance |
| Timeline |
| Siemens Healthineers |
| DIeteren Group SA |
Siemens Healthineers and DIeteren Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and DIeteren Group
The main advantage of trading using opposite Siemens Healthineers and DIeteren Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, DIeteren Group 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 DIeteren Group will offset losses from the drop in DIeteren Group'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 |
| DIeteren Group vs. Goodyear Tire Rubber | DIeteren Group vs. FAST RETAIL ADR | DIeteren Group vs. Sumitomo Rubber Industries | DIeteren Group vs. NAKED WINES PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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