Correlation Between Siemens Healthineers and Sonova Holding
Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Sonova Holding 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 Sonova Holding 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 Sonova Holding AG, you can compare the effects of market volatilities on Siemens Healthineers and Sonova Holding 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 Sonova Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Sonova Holding.
Diversification Opportunities for Siemens Healthineers and Sonova Holding
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siemens and Sonova is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Sonova Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonova Holding AG 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 Sonova Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonova Holding AG has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Sonova Holding go up and down completely randomly.
Pair Corralation between Siemens Healthineers and Sonova Holding
Assuming the 90 days horizon Siemens Healthineers AG is expected to under-perform the Sonova Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Siemens Healthineers AG is 1.27 times less risky than Sonova Holding. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Sonova Holding AG is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 7,194 in Sonova Holding AG on August 26, 2024 and sell it today you would lose (219.00) from holding Sonova Holding AG or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Healthineers AG vs. Sonova Holding AG
Performance |
| Timeline |
| Siemens Healthineers |
| Sonova Holding AG |
Siemens Healthineers and Sonova Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Healthineers and Sonova Holding
The main advantage of trading using opposite Siemens Healthineers and Sonova Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers position performs unexpectedly, Sonova Holding 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 Sonova Holding will offset losses from the drop in Sonova Holding's long position.| Siemens Healthineers vs. Merck KGaA ADR | Siemens Healthineers vs. CSL | Siemens Healthineers vs. Essilor International SA | Siemens Healthineers vs. Hoya Corp |
| Sonova Holding vs. GN Store Nord | Sonova Holding vs. GN Store Nord | Sonova Holding vs. Bone Biologics Corp | Sonova Holding vs. Smith Nephew plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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