Correlation Between Siemens Healthineers and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on Siemens Healthineers and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and SLR Investment.
Diversification Opportunities for Siemens Healthineers and SLR Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siemens and SLR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and SLR Investment go up and down completely randomly.
Pair Corralation between Siemens Healthineers and SLR Investment
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the SLR Investment. But the stock apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 1.37 times less risky than SLR Investment. The stock trades about -0.25 of its potential returns per unit of risk. The SLR Investment Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,554 in SLR Investment Corp on October 14, 2024 and sell it today you would earn a total of 20.00 from holding SLR Investment Corp or generate 1.29% 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. SLR Investment Corp
Performance |
| Timeline |
| Siemens Healthineers |
| SLR Investment Corp |
Siemens Healthineers and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and SLR Investment
The main advantage of trading using opposite Siemens Healthineers and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Siemens Healthineers vs. Charter Communications | Siemens Healthineers vs. Entravision Communications | Siemens Healthineers vs. Air Lease | Siemens Healthineers vs. UNITED RENTALS |
| SLR Investment vs. WESANA HEALTH HOLD | SLR Investment vs. Hisense Home Appliances | SLR Investment vs. Siemens Healthineers AG | SLR Investment vs. RCI Hospitality Holdings |
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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