Correlation Between Siemens AG and Toshiba
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Toshiba 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 Toshiba 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 Toshiba, you can compare the effects of market volatilities on Siemens AG and Toshiba 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 Toshiba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Toshiba.
Diversification Opportunities for Siemens AG and Toshiba
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Toshiba is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Toshiba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toshiba 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 Toshiba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toshiba has no effect on the direction of Siemens AG i.e., Siemens AG and Toshiba go up and down completely randomly.
Pair Corralation between Siemens AG and Toshiba
If you would invest 3,251 in Toshiba on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Toshiba or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens AG ADR vs. Toshiba
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Siemens AG and Toshiba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Toshiba
The main advantage of trading using opposite Siemens AG and Toshiba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Toshiba 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 Toshiba will offset losses from the drop in Toshiba'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 |
| Toshiba vs. Comstock Holding Companies | Toshiba vs. JetBlue Airways Corp | Toshiba vs. Western Asset Investment | Toshiba vs. Aegean Airlines SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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