Correlation Between Siemens Healthineers and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Talanx AG 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 Talanx AG 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 Talanx AG, you can compare the effects of market volatilities on Siemens Healthineers and Talanx AG 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Talanx AG.
Diversification Opportunities for Siemens Healthineers and Talanx AG
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and Talanx is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Talanx AG go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Talanx AG
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the Talanx AG. But the stock apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 1.38 times less risky than Talanx AG. The stock trades about -0.34 of its potential returns per unit of risk. The Talanx AG is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 8,565 in Talanx AG on October 13, 2024 and sell it today you would lose (65.00) from holding Talanx AG or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Talanx AG
Performance |
| Timeline |
| Siemens Healthineers |
| Talanx AG |
Siemens Healthineers and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Talanx AG
The main advantage of trading using opposite Siemens Healthineers and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| Siemens Healthineers vs. Charter Communications | Siemens Healthineers vs. Entravision Communications | Siemens Healthineers vs. Air Lease | Siemens Healthineers vs. UNITED RENTALS |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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