Correlation Between Siemens AG and Weir Group
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Weir Group 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 Weir Group 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 Weir Group PLC, you can compare the effects of market volatilities on Siemens AG and Weir Group 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 Weir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Weir Group.
Diversification Opportunities for Siemens AG and Weir Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siemens and Weir is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Weir Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group PLC 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 Weir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group PLC has no effect on the direction of Siemens AG i.e., Siemens AG and Weir Group go up and down completely randomly.
Pair Corralation between Siemens AG and Weir Group
If you would invest 1,319 in Weir Group PLC on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Weir Group PLC or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Siemens AG ADR vs. Weir Group PLC
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Weir Group PLC |
Siemens AG and Weir Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Weir Group
The main advantage of trading using opposite Siemens AG and Weir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Weir Group 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 Weir Group will offset losses from the drop in Weir Group'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 |
| Weir Group vs. Dear Cashmere Holding | Weir Group vs. Goff Corp | Weir Group vs. Wialan Technologies | Weir Group vs. Cgrowth Capital |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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