Correlation Between Siemens Aktiengesellscha and HANNRUECKVSE ADR
Can any of the company-specific risk be diversified away by investing in both Siemens Aktiengesellscha and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Aktiengesellschaft and HANNRUECKVSE ADR 12ON, you can compare the effects of market volatilities on Siemens Aktiengesellscha and HANNRUECKVSE ADR 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 HANNRUECKVSE ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Aktiengesellscha and HANNRUECKVSE ADR.
Diversification Opportunities for Siemens Aktiengesellscha and HANNRUECKVSE ADR
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and HANNRUECKVSE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and HANNRUECKVSE ADR 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANNRUECKVSE ADR 12ON 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 HANNRUECKVSE ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANNRUECKVSE ADR 12ON has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and HANNRUECKVSE ADR go up and down completely randomly.
Pair Corralation between Siemens Aktiengesellscha and HANNRUECKVSE ADR
Assuming the 90 days trading horizon Siemens Aktiengesellscha is expected to generate 2.15 times less return on investment than HANNRUECKVSE ADR. In addition to that, Siemens Aktiengesellscha is 2.07 times more volatile than HANNRUECKVSE ADR 12ON. It trades about 0.03 of its total potential returns per unit of risk. HANNRUECKVSE ADR 12ON is currently generating about 0.15 per unit of volatility. If you would invest 3,940 in HANNRUECKVSE ADR 12ON on September 3, 2024 and sell it today you would earn a total of 120.00 from holding HANNRUECKVSE ADR 12ON or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Aktiengesellschaft vs. HANNRUECKVSE ADR 12ON
Performance |
| Timeline |
| Siemens Aktiengesellscha |
| HANNRUECKVSE ADR 12ON |
Siemens Aktiengesellscha and HANNRUECKVSE ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Aktiengesellscha and HANNRUECKVSE ADR
The main advantage of trading using opposite Siemens Aktiengesellscha and HANNRUECKVSE ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Aktiengesellscha position performs unexpectedly, HANNRUECKVSE ADR 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 HANNRUECKVSE ADR will offset losses from the drop in HANNRUECKVSE ADR's long position.| Siemens Aktiengesellscha vs. BOSTON BEER A | Siemens Aktiengesellscha vs. GigaMedia | Siemens Aktiengesellscha vs. THAI BEVERAGE | Siemens Aktiengesellscha vs. Ultra Clean Holdings |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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