Correlation Between SIEMENS AG and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both SIEMENS AG and Brockhaus Capital 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 AG and Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEMENS AG SP and Brockhaus Capital Management, you can compare the effects of market volatilities on SIEMENS AG and Brockhaus Capital 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 AG with a short position of Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS AG and Brockhaus Capital.
Diversification Opportunities for SIEMENS AG and Brockhaus Capital
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIEMENS and Brockhaus is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS AG SP and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital and SIEMENS AG 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 AG SP are associated (or correlated) with Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of SIEMENS AG i.e., SIEMENS AG and Brockhaus Capital go up and down completely randomly.
Pair Corralation between SIEMENS AG and Brockhaus Capital
Assuming the 90 days trading horizon SIEMENS AG SP is expected to generate 1.14 times more return on investment than Brockhaus Capital. However, SIEMENS AG is 1.14 times more volatile than Brockhaus Capital Management. It trades about 0.01 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about -0.26 per unit of risk. If you would invest 8,850 in SIEMENS AG SP on August 30, 2024 and sell it today you would earn a total of 0.00 from holding SIEMENS AG SP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEMENS AG SP vs. Brockhaus Capital Management
Performance |
| Timeline |
| SIEMENS AG SP |
| Brockhaus Capital |
SIEMENS AG and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEMENS AG and Brockhaus Capital
The main advantage of trading using opposite SIEMENS AG and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEMENS AG position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| SIEMENS AG vs. Superior Plus Corp | SIEMENS AG vs. NMI Holdings | SIEMENS AG vs. SIVERS SEMICONDUCTORS AB | SIEMENS AG vs. Talanx AG |
| Brockhaus Capital vs. CDL INVESTMENT | Brockhaus Capital vs. SLR Investment Corp | Brockhaus Capital vs. Nippon Steel | Brockhaus Capital vs. REINET INVESTMENTS SCA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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