Correlation Between Siemens Energy and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and Ballard Power 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 Energy and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Energy AG and Ballard Power Systems, you can compare the effects of market volatilities on Siemens Energy and Ballard Power 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 Energy with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and Ballard Power.
Diversification Opportunities for Siemens Energy and Ballard Power
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Siemens and Ballard is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Siemens Energy 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 Energy AG are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Siemens Energy i.e., Siemens Energy and Ballard Power go up and down completely randomly.
Pair Corralation between Siemens Energy and Ballard Power
Assuming the 90 days horizon Siemens Energy AG is expected to generate 0.54 times more return on investment than Ballard Power. However, Siemens Energy AG is 1.86 times less risky than Ballard Power. It trades about 0.34 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.04 per unit of risk. If you would invest 4,150 in Siemens Energy AG on August 31, 2024 and sell it today you would earn a total of 1,008 from holding Siemens Energy AG or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Energy AG vs. Ballard Power Systems
Performance |
| Timeline |
| Siemens Energy AG |
| Ballard Power Systems |
Siemens Energy and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and Ballard Power
The main advantage of trading using opposite Siemens Energy and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Siemens Energy vs. Schneider Electric SE | Siemens Energy vs. Vestas Wind Systems | Siemens Energy vs. Hillenbrand | Siemens Energy vs. Generac Holdings |
| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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