Correlation Between SIEMENS AG and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both SIEMENS AG and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha 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 Siemens Aktiengesellschaft, you can compare the effects of market volatilities on SIEMENS AG and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS AG and Siemens Aktiengesellscha.
Diversification Opportunities for SIEMENS AG and Siemens Aktiengesellscha
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SIEMENS and Siemens is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS AG SP and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of SIEMENS AG i.e., SIEMENS AG and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between SIEMENS AG and Siemens Aktiengesellscha
Assuming the 90 days trading horizon SIEMENS AG SP is expected to generate 1.15 times more return on investment than Siemens Aktiengesellscha. However, SIEMENS AG is 1.15 times more volatile than Siemens Aktiengesellschaft. It trades about 0.15 of its potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.16 per unit of risk. If you would invest 8,000 in SIEMENS AG SP on September 12, 2024 and sell it today you would earn a total of 1,500 from holding SIEMENS AG SP or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEMENS AG SP vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| SIEMENS AG SP |
| Siemens Aktiengesellscha |
SIEMENS AG and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEMENS AG and Siemens Aktiengesellscha
The main advantage of trading using opposite SIEMENS AG and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEMENS AG position performs unexpectedly, Siemens Aktiengesellscha 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 Siemens Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| SIEMENS AG vs. Brockhaus Capital Management | SIEMENS AG vs. Coor Service Management | SIEMENS AG vs. Jupiter Fund Management | SIEMENS AG vs. Harmony Gold Mining |
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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 Stocks Directory module to find actively traded stocks across global markets.
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