Correlation Between Thermo Fisher and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and Siemens Healthineers 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 Thermo Fisher and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermo Fisher Scientific and Siemens Healthineers AG, you can compare the effects of market volatilities on Thermo Fisher and Siemens Healthineers 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 Thermo Fisher with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Siemens Healthineers.
Diversification Opportunities for Thermo Fisher and Siemens Healthineers
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thermo and Siemens is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Thermo Fisher 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 Thermo Fisher Scientific are associated (or correlated) with Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Thermo Fisher and Siemens Healthineers
Assuming the 90 days horizon Thermo Fisher Scientific is expected to generate 0.88 times more return on investment than Siemens Healthineers. However, Thermo Fisher Scientific is 1.13 times less risky than Siemens Healthineers. It trades about 0.46 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.15 per unit of risk. If you would invest 50,490 in Thermo Fisher Scientific on October 25, 2024 and sell it today you would earn a total of 4,880 from holding Thermo Fisher Scientific or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Siemens Healthineers AG
Performance |
| Timeline |
| Thermo Fisher Scientific |
| Siemens Healthineers |
Thermo Fisher and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and Siemens Healthineers
The main advantage of trading using opposite Thermo Fisher and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.| Thermo Fisher vs. United Airlines Holdings | Thermo Fisher vs. Gol Intelligent Airlines | Thermo Fisher vs. Forsys Metals Corp | Thermo Fisher vs. International Consolidated Airlines |
| Siemens Healthineers vs. Thermo Fisher Scientific | Siemens Healthineers vs. Agilent Technologies | Siemens Healthineers vs. IDEXX Laboratories | Siemens Healthineers vs. IQVIA Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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