Correlation Between Siemens Aktiengesellscha and Deutz AG
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Deutz 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 Deutz 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 Deutz AG, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Deutz 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 Deutz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Deutz AG.
Diversification Opportunities for Siemens Aktiengesellscha and Deutz AG
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Siemens and Deutz is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Deutz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutz AG 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 Deutz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutz AG has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Deutz AG go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Deutz AG
Assuming the 90 days horizon Siemens Aktiengesellschaft is expected to generate 0.62 times more return on investment than Deutz AG. However, Siemens Aktiengesellschaft is 1.61 times less risky than Deutz AG. It trades about 0.06 of its potential returns per unit of risk. Deutz AG is currently generating about 0.01 per unit of risk. If you would invest 12,475 in Siemens Aktiengesellschaft on September 4, 2024 and sell it today you would earn a total of 5,889 from holding Siemens Aktiengesellschaft or generate 47.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Deutz AG
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Deutz AG |
Siemens Aktiengesellscha and Deutz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Deutz AG
The main advantage of trading using opposite Siemens Aktiengesellscha and Deutz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Deutz 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 Deutz AG will offset losses from the drop in Deutz AG's long position.| Siemens Aktiengesellscha vs. Live Nation Entertainment | Siemens Aktiengesellscha vs. TOWNSQUARE MEDIA INC | Siemens Aktiengesellscha vs. Townsquare Media | Siemens Aktiengesellscha vs. Beijing Media |
| Deutz AG vs. SBA Communications Corp | Deutz AG vs. Shenandoah Telecommunications | Deutz AG vs. Singapore Telecommunications Limited | Deutz AG vs. Zoom Video Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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