Correlation Between Siemens Healthineers and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Kingdee International 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 Kingdee International 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 Kingdee International Software, you can compare the effects of market volatilities on Siemens Healthineers and Kingdee International 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Kingdee International.
Diversification Opportunities for Siemens Healthineers and Kingdee International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and Kingdee is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Kingdee International go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Kingdee International
Assuming the 90 days horizon Siemens Healthineers is expected to generate 14.98 times less return on investment than Kingdee International. But when comparing it to its historical volatility, Siemens Healthineers AG is 2.91 times less risky than Kingdee International. It trades about 0.01 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 90.00 in Kingdee International Software on November 8, 2024 and sell it today you would earn a total of 44.00 from holding Kingdee International Software or generate 48.89% 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. Kingdee International Software
Performance |
| Timeline |
| Siemens Healthineers |
| Kingdee International |
Siemens Healthineers and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Kingdee International
The main advantage of trading using opposite Siemens Healthineers and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Siemens Healthineers vs. CullenFrost Bankers | Siemens Healthineers vs. BANKINTER ADR 2007 | Siemens Healthineers vs. Fortescue Metals Group | Siemens Healthineers vs. Air Transport Services |
| Kingdee International vs. Intuit Inc | Kingdee International vs. Palo Alto Networks | Kingdee International vs. Synopsys | Kingdee International vs. Cadence Design Systems |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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