Correlation Between United Natural and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and Siemens Healthineers AG, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Siemens Healthineers.
Diversification Opportunities for United Natural and Siemens Healthineers
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Siemens is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and United Natural 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 United Natural Foods 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 United Natural i.e., United Natural and Siemens Healthineers go up and down completely randomly.
Pair Corralation between United Natural and Siemens Healthineers
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Siemens Healthineers. In addition to that, United Natural is 2.8 times more volatile than Siemens Healthineers AG. It trades about 0.0 of its total potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.01 per unit of volatility. If you would invest 5,134 in Siemens Healthineers AG on October 29, 2024 and sell it today you would earn a total of 274.00 from holding Siemens Healthineers AG or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Siemens Healthineers AG
Performance |
| Timeline |
| United Natural Foods |
| Siemens Healthineers |
United Natural and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Siemens Healthineers
The main advantage of trading using opposite United Natural and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. Nippon Light Metal | United Natural vs. Yuexiu Transport Infrastructure | United Natural vs. AEON METALS LTD | United Natural vs. Jacquet Metal Service |
| Siemens Healthineers vs. AGNC INVESTMENT | Siemens Healthineers vs. PLAYMATES TOYS | Siemens Healthineers vs. GigaMedia | Siemens Healthineers vs. FRACTAL GAMING GROUP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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