Correlation Between Siemens Energy and Aumann AG
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and Aumann AG 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 Aumann AG 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 Aumann AG, you can compare the effects of market volatilities on Siemens Energy and Aumann AG 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 Aumann AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and Aumann AG.
Diversification Opportunities for Siemens Energy and Aumann AG
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Siemens and Aumann is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and Aumann AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumann AG 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 Aumann AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumann AG has no effect on the direction of Siemens Energy i.e., Siemens Energy and Aumann AG go up and down completely randomly.
Pair Corralation between Siemens Energy and Aumann AG
Assuming the 90 days horizon Siemens Energy AG is expected to generate 1.21 times more return on investment than Aumann AG. However, Siemens Energy is 1.21 times more volatile than Aumann AG. It trades about 0.07 of its potential returns per unit of risk. Aumann AG is currently generating about -0.05 per unit of risk. If you would invest 2,419 in Siemens Energy AG on August 26, 2024 and sell it today you would earn a total of 2,535 from holding Siemens Energy AG or generate 104.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 53.05% |
| Values | Daily Returns |
Siemens Energy AG vs. Aumann AG
Performance |
| Timeline |
| Siemens Energy AG |
| Aumann AG |
Siemens Energy and Aumann AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and Aumann AG
The main advantage of trading using opposite Siemens Energy and Aumann AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, Aumann AG 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 Aumann AG will offset losses from the drop in Aumann AG's long position.| Siemens Energy vs. Aumann AG | Siemens Energy vs. Arista Power | Siemens Energy vs. Atlas Copco AB | Siemens Energy vs. American Commerce Solutions |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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