Correlation Between Siemens AG and ATS
Can any of the company-specific risk be diversified away by investing in both Siemens AG and ATS 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 ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens AG Class and ATS Corporation, you can compare the effects of market volatilities on Siemens AG and ATS 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 ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and ATS.
Diversification Opportunities for Siemens AG and ATS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and ATS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation 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 Class are associated (or correlated) with ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Siemens AG i.e., Siemens AG and ATS go up and down completely randomly.
Pair Corralation between Siemens AG and ATS
Assuming the 90 days horizon Siemens AG is expected to generate 5.7 times less return on investment than ATS. But when comparing it to its historical volatility, Siemens AG Class is 1.44 times less risky than ATS. It trades about 0.02 of its potential returns per unit of risk. ATS Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,013 in ATS Corporation on September 5, 2024 and sell it today you would earn a total of 197.00 from holding ATS Corporation or generate 6.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Siemens AG Class vs. ATS Corp.
Performance |
Timeline |
Siemens AG Class |
ATS Corporation |
Siemens AG and ATS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Siemens AG and ATS
The main advantage of trading using opposite Siemens AG and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS's long position.Siemens AG vs. Shapeways Holdings, Common | Siemens AG vs. JE Cleantech Holdings | Siemens AG vs. Greenland Acquisition Corp | Siemens AG vs. Laser Photonics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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