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 The Weir Group, 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
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Siemens and Weir is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and The Weir Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group 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 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
Assuming the 90 days horizon Siemens AG ADR is expected to generate 0.76 times more return on investment than Weir Group. However, Siemens AG ADR is 1.31 times less risky than Weir Group. It trades about 0.2 of its potential returns per unit of risk. The Weir Group is currently generating about 0.04 per unit of risk. If you would invest 7,042 in Siemens AG ADR on September 4, 2024 and sell it today you would earn a total of 793.00 from holding Siemens AG ADR or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 11.02% |
| Values | Daily Returns |
Siemens AG ADR vs. The Weir Group
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Weir Group |
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. Shanghai Electric Group | Weir Group vs. Xinjiang Goldwind Science | Weir Group vs. American Superconductor | Weir Group vs. Cummins |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |