Correlation Between Siemens AG and Richtech Robotics
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Richtech Robotics 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 Richtech Robotics 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 Richtech Robotics Class, you can compare the effects of market volatilities on Siemens AG and Richtech Robotics 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 Richtech Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Richtech Robotics.
Diversification Opportunities for Siemens AG and Richtech Robotics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siemens and Richtech is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics Class 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 Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of Siemens AG i.e., Siemens AG and Richtech Robotics go up and down completely randomly.
Pair Corralation between Siemens AG and Richtech Robotics
Assuming the 90 days horizon Siemens AG Class is expected to generate 0.26 times more return on investment than Richtech Robotics. However, Siemens AG Class is 3.79 times less risky than Richtech Robotics. It trades about 0.1 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about -0.01 per unit of risk. If you would invest 18,260 in Siemens AG Class on September 12, 2024 and sell it today you would earn a total of 2,240 from holding Siemens AG Class or generate 12.27% 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. Richtech Robotics Class
Performance |
| Timeline |
| Siemens AG Class |
| Richtech Robotics Class |
Siemens AG and Richtech Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Richtech Robotics
The main advantage of trading using opposite Siemens AG and Richtech Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Richtech Robotics 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 Richtech Robotics will offset losses from the drop in Richtech Robotics' 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 |
| Richtech Robotics vs. Logan Ridge Finance | Richtech Robotics vs. Stepstone Group | Richtech Robotics vs. ICC Holdings | Richtech Robotics vs. Aspen Insurance Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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