Correlation Between Siemens Healthineers and LG Display
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and LG Display 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 LG Display 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 LG Display Co, you can compare the effects of market volatilities on Siemens Healthineers and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and LG Display.
Diversification Opportunities for Siemens Healthineers and LG Display
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siemens and LGA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and LG Display go up and down completely randomly.
Pair Corralation between Siemens Healthineers and LG Display
Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.58 times more return on investment than LG Display. However, Siemens Healthineers AG is 1.74 times less risky than LG Display. It trades about 0.03 of its potential returns per unit of risk. LG Display Co is currently generating about -0.05 per unit of risk. If you would invest 5,047 in Siemens Healthineers AG on October 30, 2024 and sell it today you would earn a total of 361.00 from holding Siemens Healthineers AG or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. LG Display Co
Performance |
| Timeline |
| Siemens Healthineers |
| LG Display |
Siemens Healthineers and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and LG Display
The main advantage of trading using opposite Siemens Healthineers and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Siemens Healthineers vs. MARKET VECTR RETAIL | Siemens Healthineers vs. GURU ORGANIC ENERGY | Siemens Healthineers vs. PATTIES FOODS | Siemens Healthineers vs. Performance Food Group |
| LG Display vs. HANOVER INSURANCE | LG Display vs. MAVEN WIRELESS SWEDEN | LG Display vs. Insurance Australia Group | LG Display vs. Reinsurance Group of |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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