Correlation Between Siemens Aktiengesellscha and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Nel ASA 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 Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and Nel ASA, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Nel ASA.
Diversification Opportunities for Siemens Aktiengesellscha and Nel ASA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siemens and Nel is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Nel ASA go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Nel ASA
Assuming the 90 days horizon Siemens Aktiengesellschaft is expected to generate 0.21 times more return on investment than Nel ASA. However, Siemens Aktiengesellschaft is 4.7 times less risky than Nel ASA. It trades about 0.13 of its potential returns per unit of risk. Nel ASA is currently generating about -0.23 per unit of risk. If you would invest 18,930 in Siemens Aktiengesellschaft on October 20, 2024 and sell it today you would earn a total of 596.00 from holding Siemens Aktiengesellschaft or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Nel ASA
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Nel ASA |
Siemens Aktiengesellscha and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Nel ASA
The main advantage of trading using opposite Siemens Aktiengesellscha and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Siemens Aktiengesellscha vs. SIEMENS AG SP | Siemens Aktiengesellscha vs. Schneider Electric SE | Siemens Aktiengesellscha vs. Atlas Copco A | Siemens Aktiengesellscha vs. RATIONAL Aktiengesellschaft |
| Nel ASA vs. Powercell Sweden | Nel ASA vs. ITM Power Plc | Nel ASA vs. Ballard Power Systems | Nel ASA vs. Xiaomi |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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