Correlation Between SIEMENS HEALTH and Danaher
Can any of the company-specific risk be diversified away by investing in both SIEMENS HEALTH and Danaher 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 HEALTH and Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEMENS HEALTH ADR050 and Danaher, you can compare the effects of market volatilities on SIEMENS HEALTH and Danaher 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 HEALTH with a short position of Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS HEALTH and Danaher.
Diversification Opportunities for SIEMENS HEALTH and Danaher
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SIEMENS and Danaher is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS HEALTH ADR050 and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and SIEMENS HEALTH 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 HEALTH ADR050 are associated (or correlated) with Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of SIEMENS HEALTH i.e., SIEMENS HEALTH and Danaher go up and down completely randomly.
Pair Corralation between SIEMENS HEALTH and Danaher
Assuming the 90 days trading horizon SIEMENS HEALTH ADR050 is expected to generate 1.39 times more return on investment than Danaher. However, SIEMENS HEALTH is 1.39 times more volatile than Danaher. It trades about -0.01 of its potential returns per unit of risk. Danaher is currently generating about -0.03 per unit of risk. If you would invest 2,700 in SIEMENS HEALTH ADR050 on September 3, 2024 and sell it today you would lose (120.00) from holding SIEMENS HEALTH ADR050 or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEMENS HEALTH ADR050 vs. Danaher
Performance |
| Timeline |
| SIEMENS HEALTH ADR050 |
| Danaher |
SIEMENS HEALTH and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEMENS HEALTH and Danaher
The main advantage of trading using opposite SIEMENS HEALTH and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEMENS HEALTH position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| SIEMENS HEALTH vs. Thermo Fisher Scientific | SIEMENS HEALTH vs. Danaher | SIEMENS HEALTH vs. Danaher | SIEMENS HEALTH vs. DexCom Inc |
| Danaher vs. Thermo Fisher Scientific | Danaher vs. Danaher | Danaher vs. SIEMENS HEALTH ADR050 | Danaher vs. DexCom Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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