Correlation Between Siemens Healthineers and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Thermo Fisher 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 Thermo Fisher 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 Thermo Fisher Scientific, you can compare the effects of market volatilities on Siemens Healthineers and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Thermo Fisher.
Diversification Opportunities for Siemens Healthineers and Thermo Fisher
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siemens and Thermo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Thermo Fisher go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Thermo Fisher
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the Thermo Fisher. But the stock apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 1.28 times less risky than Thermo Fisher. The stock trades about -0.12 of its potential returns per unit of risk. The Thermo Fisher Scientific is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 51,500 in Thermo Fisher Scientific on October 11, 2024 and sell it today you would earn a total of 1,190 from holding Thermo Fisher Scientific or generate 2.31% 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. Thermo Fisher Scientific
Performance |
| Timeline |
| Siemens Healthineers |
| Thermo Fisher Scientific |
Siemens Healthineers and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Thermo Fisher
The main advantage of trading using opposite Siemens Healthineers and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| Siemens Healthineers vs. MOBILE FACTORY INC | Siemens Healthineers vs. SUN LIFE FINANCIAL | Siemens Healthineers vs. Charter Communications | Siemens Healthineers vs. CDN IMPERIAL BANK |
| Thermo Fisher vs. SPORT LISBOA E | Thermo Fisher vs. NTG Nordic Transport | Thermo Fisher vs. COLUMBIA SPORTSWEAR | Thermo Fisher vs. Columbia Sportswear |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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