Correlation Between Siemens AG and Rockwell Automation
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation, you can compare the effects of market volatilities on Siemens AG and Rockwell Automation 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 Rockwell Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Rockwell Automation.
Diversification Opportunities for Siemens AG and Rockwell Automation
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siemens and Rockwell is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and Rockwell Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockwell Automation 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 Rockwell Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockwell Automation has no effect on the direction of Siemens AG i.e., Siemens AG and Rockwell Automation go up and down completely randomly.
Pair Corralation between Siemens AG and Rockwell Automation
Assuming the 90 days horizon Siemens AG Class is expected to under-perform the Rockwell Automation. But the pink sheet apears to be less risky and, when comparing its historical volatility, Siemens AG Class is 1.17 times less risky than Rockwell Automation. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Rockwell Automation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 26,937 in Rockwell Automation on August 28, 2024 and sell it today you would earn a total of 2,663 from holding Rockwell Automation or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens AG Class vs. Rockwell Automation
Performance |
| Timeline |
| Siemens AG Class |
| Rockwell Automation |
Siemens AG and Rockwell Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Rockwell Automation
The main advantage of trading using opposite Siemens AG and Rockwell Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Rockwell Automation 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 Rockwell Automation will offset losses from the drop in Rockwell Automation'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 |
| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton PLC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |