Correlation Between Siemens AG and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric Corp, you can compare the effects of market volatilities on Siemens AG and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Yokogawa Electric.
Diversification Opportunities for Siemens AG and Yokogawa Electric
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Yokogawa is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG ADR and Yokogawa Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric Corp has no effect on the direction of Siemens AG i.e., Siemens AG and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Siemens AG and Yokogawa Electric
If you would invest 3,654 in Yokogawa Electric Corp on August 29, 2024 and sell it today you would earn a total of 728.00 from holding Yokogawa Electric Corp or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.3% |
| Values | Daily Returns |
Siemens AG ADR vs. Yokogawa Electric Corp
Performance |
| Timeline |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Yokogawa Electric Corp |
Siemens AG and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Yokogawa Electric
The main advantage of trading using opposite Siemens AG and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric'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 |
| Yokogawa Electric vs. Brewbilt Manufacturing | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. ITM Power Plc | Yokogawa Electric vs. Schneider Electric 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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