Correlation Between Siemens Healthineers and CochLear
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and CochLear 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 Healthineers and CochLear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Healthineers AG and CochLear Ltd ADR, you can compare the effects of market volatilities on Siemens Healthineers and CochLear 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 Healthineers with a short position of CochLear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and CochLear.
Diversification Opportunities for Siemens Healthineers and CochLear
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siemens and CochLear is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and CochLear Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CochLear ADR and Siemens Healthineers 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 Healthineers AG are associated (or correlated) with CochLear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CochLear ADR has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and CochLear go up and down completely randomly.
Pair Corralation between Siemens Healthineers and CochLear
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the CochLear. But the pink sheet apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 1.08 times less risky than CochLear. The pink sheet trades about -0.02 of its potential returns per unit of risk. The CochLear Ltd ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,117 in CochLear Ltd ADR on August 30, 2024 and sell it today you would earn a total of 1,872 from holding CochLear Ltd ADR or generate 23.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. CochLear Ltd ADR
Performance |
| Timeline |
| Siemens Healthineers |
| CochLear ADR |
Siemens Healthineers and CochLear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and CochLear
The main advantage of trading using opposite Siemens Healthineers and CochLear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, CochLear 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 CochLear will offset losses from the drop in CochLear's long position.| Siemens Healthineers vs. Brainsway | Siemens Healthineers vs. Bluejay Diagnostics | Siemens Healthineers vs. Venus Concept | Siemens Healthineers vs. Icecure Medical |
| CochLear vs. Smith Nephew SNATS | CochLear vs. Integer Holdings Corp | CochLear vs. Demant AS ADR | CochLear vs. GN Store Nord |
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 Stocks Directory module to find actively traded stocks across global markets.
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