Correlation Between Siemens Healthineers and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Siemens Healthineers and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Universal Entertainment.
Diversification Opportunities for Siemens Healthineers and Universal Entertainment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Universal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Universal Entertainment go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Universal Entertainment
Assuming the 90 days horizon Siemens Healthineers is expected to generate 2.62 times less return on investment than Universal Entertainment. But when comparing it to its historical volatility, Siemens Healthineers AG is 2.29 times less risky than Universal Entertainment. It trades about 0.18 of its potential returns per unit of risk. Universal Entertainment is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 615.00 in Universal Entertainment on November 7, 2024 and sell it today you would earn a total of 85.00 from holding Universal Entertainment or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Universal Entertainment
Performance |
| Timeline |
| Siemens Healthineers |
| Universal Entertainment |
Siemens Healthineers and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Universal Entertainment
The main advantage of trading using opposite Siemens Healthineers and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Siemens Healthineers vs. PLANT VEDA FOODS | Siemens Healthineers vs. PREMIER FOODS | Siemens Healthineers vs. MONEYSUPERMARKET | Siemens Healthineers vs. Tyson Foods |
| Universal Entertainment vs. Easy Software AG | Universal Entertainment vs. Siamgas And Petrochemicals | Universal Entertainment vs. PSI Software AG | Universal Entertainment vs. Air Lease |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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