Correlation Between Siemens Aktiengesellscha and Deutsche Lufthansa
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Deutsche Lufthansa 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 Deutsche Lufthansa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and Deutsche Lufthansa AG, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Deutsche Lufthansa 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 Deutsche Lufthansa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Deutsche Lufthansa.
Diversification Opportunities for Siemens Aktiengesellscha and Deutsche Lufthansa
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and Deutsche is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Deutsche Lufthansa AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Lufthansa 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 Deutsche Lufthansa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Lufthansa has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Deutsche Lufthansa go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Deutsche Lufthansa
Assuming the 90 days horizon Siemens Aktiengesellschaft is expected to generate 0.81 times more return on investment than Deutsche Lufthansa. However, Siemens Aktiengesellschaft is 1.23 times less risky than Deutsche Lufthansa. It trades about 0.06 of its potential returns per unit of risk. Deutsche Lufthansa AG is currently generating about -0.01 per unit of risk. If you would invest 12,495 in Siemens Aktiengesellschaft on August 29, 2024 and sell it today you would earn a total of 5,481 from holding Siemens Aktiengesellschaft or generate 43.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Deutsche Lufthansa AG
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Deutsche Lufthansa |
Siemens Aktiengesellscha and Deutsche Lufthansa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Deutsche Lufthansa
The main advantage of trading using opposite Siemens Aktiengesellscha and Deutsche Lufthansa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Deutsche Lufthansa 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 Deutsche Lufthansa will offset losses from the drop in Deutsche Lufthansa's long position.| Siemens Aktiengesellscha vs. CarsalesCom | Siemens Aktiengesellscha vs. Park Hotels Resorts | Siemens Aktiengesellscha vs. BOS BETTER ONLINE | Siemens Aktiengesellscha vs. Host Hotels Resorts |
| Deutsche Lufthansa vs. Columbia Sportswear | Deutsche Lufthansa vs. Gold Road Resources | Deutsche Lufthansa vs. OFFICE DEPOT | Deutsche Lufthansa vs. Fukuyama Transporting Co |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |