Correlation Between Siemens Healthineers and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Playa Hotels 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 Playa Hotels 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 Playa Hotels Resorts, you can compare the effects of market volatilities on Siemens Healthineers and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Playa Hotels.
Diversification Opportunities for Siemens Healthineers and Playa Hotels
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siemens and Playa is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Playa Hotels go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Playa Hotels
Assuming the 90 days horizon Siemens Healthineers is expected to generate 5.14 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, Siemens Healthineers AG is 1.57 times less risky than Playa Hotels. It trades about 0.02 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Playa Hotels Resorts on October 16, 2024 and sell it today you would earn a total of 535.00 from holding Playa Hotels Resorts or generate 81.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Playa Hotels Resorts
Performance |
| Timeline |
| Siemens Healthineers |
| Playa Hotels Resorts |
Siemens Healthineers and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Playa Hotels
The main advantage of trading using opposite Siemens Healthineers and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Siemens Healthineers vs. Playa Hotels Resorts | Siemens Healthineers vs. LG Display Co | Siemens Healthineers vs. COLUMBIA SPORTSWEAR | Siemens Healthineers vs. PLAYSTUDIOS A DL 0001 |
| Playa Hotels vs. ecotel communication ag | Playa Hotels vs. Highlight Communications AG | Playa Hotels vs. Cairo Communication SpA | Playa Hotels vs. Ribbon Communications |
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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