Correlation Between Siemens Healthineers and Guided Therapeutics
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Guided Therapeutics 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 Guided Therapeutics 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 Guided Therapeutics, you can compare the effects of market volatilities on Siemens Healthineers and Guided Therapeutics 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 Guided Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Guided Therapeutics.
Diversification Opportunities for Siemens Healthineers and Guided Therapeutics
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siemens and Guided is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Guided Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guided Therapeutics 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 Guided Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guided Therapeutics has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Guided Therapeutics go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Guided Therapeutics
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the Guided Therapeutics. But the pink sheet apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 10.22 times less risky than Guided Therapeutics. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Guided Therapeutics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Guided Therapeutics on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Guided Therapeutics or generate 90.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Guided Therapeutics
Performance |
| Timeline |
| Siemens Healthineers |
| Guided Therapeutics |
Siemens Healthineers and Guided Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Guided Therapeutics
The main advantage of trading using opposite Siemens Healthineers and Guided Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Guided Therapeutics 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 Guided Therapeutics will offset losses from the drop in Guided Therapeutics' long position.| Siemens Healthineers vs. Medtronic PLC | Siemens Healthineers vs. CONMED | Siemens Healthineers vs. Glaukos Corp | Siemens Healthineers vs. Integer Holdings Corp |
| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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