Correlation Between Siemens Healthineers and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Peninsula Energy 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 Peninsula Energy 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 Peninsula Energy Limited, you can compare the effects of market volatilities on Siemens Healthineers and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Peninsula Energy.
Diversification Opportunities for Siemens Healthineers and Peninsula Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Peninsula is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Peninsula Energy go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Peninsula Energy
Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.19 times more return on investment than Peninsula Energy. However, Siemens Healthineers AG is 5.4 times less risky than Peninsula Energy. It trades about 0.18 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about 0.02 per unit of risk. If you would invest 5,220 in Siemens Healthineers AG on November 8, 2024 and sell it today you would earn a total of 266.00 from holding Siemens Healthineers AG or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Peninsula Energy Limited
Performance |
| Timeline |
| Siemens Healthineers |
| Peninsula Energy |
Siemens Healthineers and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Peninsula Energy
The main advantage of trading using opposite Siemens Healthineers and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| Siemens Healthineers vs. PLANT VEDA FOODS | Siemens Healthineers vs. PREMIER FOODS | Siemens Healthineers vs. MONEYSUPERMARKET | Siemens Healthineers vs. Tyson Foods |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Vale SA | Peninsula Energy vs. Vale SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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