Correlation Between Siemens Healthineers and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Playtech Plc 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 Playtech Plc 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 Playtech plc, you can compare the effects of market volatilities on Siemens Healthineers and Playtech Plc 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Playtech Plc.
Diversification Opportunities for Siemens Healthineers and Playtech Plc
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siemens and Playtech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Playtech Plc go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Playtech Plc
Assuming the 90 days horizon Siemens Healthineers is expected to generate 5.97 times less return on investment than Playtech Plc. But when comparing it to its historical volatility, Siemens Healthineers AG is 1.37 times less risky than Playtech Plc. It trades about 0.03 of its potential returns per unit of risk. Playtech plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 503.00 in Playtech plc on October 30, 2024 and sell it today you would earn a total of 342.00 from holding Playtech plc or generate 67.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Playtech plc
Performance |
| Timeline |
| Siemens Healthineers |
| Playtech plc |
Siemens Healthineers and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Playtech Plc
The main advantage of trading using opposite Siemens Healthineers and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Playtech Plc 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 Playtech Plc will offset losses from the drop in Playtech Plc'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 |
| Playtech Plc vs. S E BANKEN A | Playtech Plc vs. PNC Financial Services | Playtech Plc vs. GMO Internet | Playtech Plc vs. Check Point Software |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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