Correlation Between Siemens Aktiengesellscha and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Bayer 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 Aktiengesellscha and Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and Bayer AG NA, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Bayer 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 Aktiengesellscha with a short position of Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Bayer AG.
Diversification Opportunities for Siemens Aktiengesellscha and Bayer AG
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Bayer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA and Siemens Aktiengesellscha 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 Aktiengesellschaft are associated (or correlated) with Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Bayer AG go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Bayer AG
Assuming the 90 days horizon Siemens Aktiengesellschaft is expected to generate 0.49 times more return on investment than Bayer AG. However, Siemens Aktiengesellschaft is 2.03 times less risky than Bayer AG. It trades about -0.03 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.34 per unit of risk. If you would invest 17,894 in Siemens Aktiengesellschaft on August 25, 2024 and sell it today you would lose (272.00) from holding Siemens Aktiengesellschaft or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Bayer AG NA
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Bayer AG NA |
Siemens Aktiengesellscha and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Bayer AG
The main advantage of trading using opposite Siemens Aktiengesellscha and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Bayer 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Siemens Aktiengesellscha vs. Superior Plus Corp | Siemens Aktiengesellscha vs. NMI Holdings | Siemens Aktiengesellscha vs. Origin Agritech | Siemens Aktiengesellscha vs. SIVERS SEMICONDUCTORS AB |
| Bayer AG vs. Western Copper and | Bayer AG vs. LION ONE METALS | Bayer AG vs. ADRIATIC METALS LS 013355 | Bayer AG vs. Zijin Mining Group |
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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