Correlation Between Siemens Aktiengesellscha and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and Atlas Copco 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 Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and Atlas Copco A, you can compare the effects of market volatilities on Siemens Aktiengesellscha and Atlas Copco 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 Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and Atlas Copco.
Diversification Opportunities for Siemens Aktiengesellscha and Atlas Copco
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siemens and Atlas is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Atlas Copco A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco A 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 Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco A has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Atlas Copco go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and Atlas Copco
Assuming the 90 days trading horizon Siemens Aktiengesellscha is expected to generate 1.27 times less return on investment than Atlas Copco. But when comparing it to its historical volatility, Siemens Aktiengesellschaft is 2.23 times less risky than Atlas Copco. It trades about 0.07 of its potential returns per unit of risk. Atlas Copco A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,053 in Atlas Copco A on September 12, 2024 and sell it today you would earn a total of 477.00 from holding Atlas Copco A or generate 45.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. Atlas Copco A
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| Atlas Copco A |
Siemens Aktiengesellscha and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and Atlas Copco
The main advantage of trading using opposite Siemens Aktiengesellscha and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Siemens Aktiengesellscha vs. MELIA HOTELS | Siemens Aktiengesellscha vs. Harmony Gold Mining | Siemens Aktiengesellscha vs. Choice Hotels International | Siemens Aktiengesellscha vs. PPHE HOTEL GROUP |
| Atlas Copco vs. Ping An Insurance | Atlas Copco vs. REVO INSURANCE SPA | Atlas Copco vs. Lion One Metals | Atlas Copco vs. ZURICH INSURANCE 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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