Correlation Between Siemens Energy and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric, you can compare the effects of market volatilities on Siemens Energy and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and Yokogawa Electric.
Diversification Opportunities for Siemens Energy and Yokogawa Electric
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siemens and Yokogawa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and Yokogawa Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric has no effect on the direction of Siemens Energy i.e., Siemens Energy and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Siemens Energy and Yokogawa Electric
Assuming the 90 days horizon Siemens Energy AG is expected to generate 0.04 times more return on investment than Yokogawa Electric. However, Siemens Energy AG is 22.96 times less risky than Yokogawa Electric. It trades about 0.08 of its potential returns per unit of risk. Yokogawa Electric is currently generating about -0.09 per unit of risk. If you would invest 1,742 in Siemens Energy AG on August 26, 2024 and sell it today you would earn a total of 3,212 from holding Siemens Energy AG or generate 184.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Siemens Energy AG vs. Yokogawa Electric
Performance |
| Timeline |
| Siemens Energy AG |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Siemens Energy and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and Yokogawa Electric
The main advantage of trading using opposite Siemens Energy and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric'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 |
| Yokogawa Electric vs. Daifuku Co | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Yokogawa Electric Corp | Yokogawa Electric vs. Nidec |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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