Correlation Between Siemens AG and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Siemens AG and Xinjiang Goldwind 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 Xinjiang Goldwind 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 Xinjiang Goldwind Science, you can compare the effects of market volatilities on Siemens AG and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Xinjiang Goldwind.
Diversification Opportunities for Siemens AG and Xinjiang Goldwind
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and Xinjiang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Siemens AG i.e., Siemens AG and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Siemens AG and Xinjiang Goldwind
Assuming the 90 days horizon Siemens AG Class is expected to generate 0.84 times more return on investment than Xinjiang Goldwind. However, Siemens AG Class is 1.19 times less risky than Xinjiang Goldwind. It trades about -0.04 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.21 per unit of risk. If you would invest 19,395 in Siemens AG Class on August 29, 2024 and sell it today you would lose (479.00) from holding Siemens AG Class or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Siemens AG Class vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Siemens AG Class |
| Xinjiang Goldwind Science |
Siemens AG and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens AG and Xinjiang Goldwind
The main advantage of trading using opposite Siemens AG and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens AG position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind'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 |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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