Correlation Between Siemens AG and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Wartsila Oyj 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 Wartsila Oyj 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 Wartsila Oyj Abp, you can compare the effects of market volatilities on Siemens AG and Wartsila Oyj 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 Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Wartsila Oyj.
Diversification Opportunities for Siemens AG and Wartsila Oyj
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Wartsila is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp 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 Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Siemens AG i.e., Siemens AG and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Siemens AG and Wartsila Oyj
If you would invest 7,835 in Siemens AG ADR on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Siemens AG ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Siemens AG ADR vs. Wartsila Oyj Abp
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wartsila Oyj Abp |
Siemens AG and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Wartsila Oyj
The main advantage of trading using opposite Siemens AG and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Wartsila Oyj 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 Wartsila Oyj will offset losses from the drop in Wartsila Oyj'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 |
| Wartsila Oyj vs. Sandvik AB ADR | Wartsila Oyj vs. Rockwell Automation | Wartsila Oyj vs. Park Ohio Holdings | Wartsila Oyj vs. Gates Industrial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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