Correlation Between Siemens AG and Nuscale Power
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Nuscale Power 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 Nuscale Power 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 Nuscale Power Corp, you can compare the effects of market volatilities on Siemens AG and Nuscale Power 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 Nuscale Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Nuscale Power.
Diversification Opportunities for Siemens AG and Nuscale Power
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siemens and Nuscale is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Nuscale Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuscale Power Corp 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 Nuscale Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuscale Power Corp has no effect on the direction of Siemens AG i.e., Siemens AG and Nuscale Power go up and down completely randomly.
Pair Corralation between Siemens AG and Nuscale Power
If you would invest 2,080 in Nuscale Power Corp on August 31, 2024 and sell it today you would earn a total of 726.00 from holding Nuscale Power Corp or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Siemens AG ADR vs. Nuscale Power Corp
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuscale Power Corp |
Siemens AG and Nuscale Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Nuscale Power
The main advantage of trading using opposite Siemens AG and Nuscale Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Nuscale Power 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 Nuscale Power will offset losses from the drop in Nuscale Power'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 |
| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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