Correlation Between Siemens AG and Nordex SE
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Nordex SE 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 Nordex SE 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 Nordex SE, you can compare the effects of market volatilities on Siemens AG and Nordex SE 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 Nordex SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Nordex SE.
Diversification Opportunities for Siemens AG and Nordex SE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siemens and Nordex is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and Nordex SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordex SE 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 Nordex SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordex SE has no effect on the direction of Siemens AG i.e., Siemens AG and Nordex SE go up and down completely randomly.
Pair Corralation between Siemens AG and Nordex SE
Assuming the 90 days horizon Siemens AG is expected to generate 52.02 times less return on investment than Nordex SE. But when comparing it to its historical volatility, Siemens AG Class is 1.64 times less risky than Nordex SE. It trades about 0.0 of its potential returns per unit of risk. Nordex SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,047 in Nordex SE on August 25, 2024 and sell it today you would earn a total of 376.00 from holding Nordex SE or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens AG Class vs. Nordex SE
Performance |
| Timeline |
| Siemens AG Class |
| Nordex SE |
Siemens AG and Nordex SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Nordex SE
The main advantage of trading using opposite Siemens AG and Nordex SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Nordex SE 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 Nordex SE will offset losses from the drop in Nordex SE's long position.| Siemens AG vs. Aumann AG | Siemens AG vs. Arista Power | Siemens AG vs. Atlas Copco AB | Siemens AG vs. American Commerce Solutions |
| Nordex SE vs. Atlas Copco AB | Nordex SE vs. Atlas Copco ADR | Nordex SE vs. Siemens AG Class | Nordex SE vs. Sandvik AB ADR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |