Correlation Between Siemens AG and Park Ohio
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Park Ohio 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 Park Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens AG ADR and Park Ohio Holdings, you can compare the effects of market volatilities on Siemens AG and Park Ohio 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 Park Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Park Ohio.
Diversification Opportunities for Siemens AG and Park Ohio
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siemens and Park is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Park Ohio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Ohio Holdings 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 ADR are associated (or correlated) with Park Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Ohio Holdings has no effect on the direction of Siemens AG i.e., Siemens AG and Park Ohio go up and down completely randomly.
Pair Corralation between Siemens AG and Park Ohio
If you would invest 2,483 in Park Ohio Holdings on September 3, 2024 and sell it today you would earn a total of 734.00 from holding Park Ohio Holdings or generate 29.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Siemens AG ADR vs. Park Ohio Holdings
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Park Ohio Holdings |
Siemens AG and Park Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Park Ohio
The main advantage of trading using opposite Siemens AG and Park Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Park Ohio 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 Park Ohio will offset losses from the drop in Park Ohio's long position.| Siemens AG vs. Sandvik AB | Siemens AG vs. Schneider Electric SA | Siemens AG vs. KONE Oyj | Siemens AG vs. Atlas Copco AB |
| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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