Correlation Between Siemens Aktiengesellscha and Otis Worldwide
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Otis Worldwide 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 Otis Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and Otis Worldwide Corp, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Otis Worldwide 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 Otis Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Otis Worldwide.
Diversification Opportunities for Siemens Aktiengesellscha and Otis Worldwide
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siemens and Otis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Otis Worldwide Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otis Worldwide Corp 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 Otis Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otis Worldwide Corp has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Otis Worldwide go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Otis Worldwide
Assuming the 90 days trading horizon Siemens Aktiengesellschaft is expected to under-perform the Otis Worldwide. In addition to that, Siemens Aktiengesellscha is 2.07 times more volatile than Otis Worldwide Corp. It trades about -0.06 of its total potential returns per unit of risk. Otis Worldwide Corp is currently generating about -0.03 per unit of volatility. If you would invest 9,477 in Otis Worldwide Corp on August 24, 2024 and sell it today you would lose (63.00) from holding Otis Worldwide Corp or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Otis Worldwide Corp
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Otis Worldwide Corp |
Siemens Aktiengesellscha and Otis Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Otis Worldwide
The main advantage of trading using opposite Siemens Aktiengesellscha and Otis Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Otis Worldwide 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 Otis Worldwide will offset losses from the drop in Otis Worldwide'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 |
| Otis Worldwide vs. Superior Plus Corp | Otis Worldwide vs. NMI Holdings | Otis Worldwide vs. Origin Agritech | Otis Worldwide vs. SIVERS SEMICONDUCTORS AB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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