Correlation Between Vestas Wind and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Vestas Wind and Siemens Aktiengesellscha 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 Vestas Wind and Siemens Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestas Wind Systems and Siemens Aktiengesellschaft, you can compare the effects of market volatilities on Vestas Wind and Siemens Aktiengesellscha 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 Vestas Wind with a short position of Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Siemens Aktiengesellscha.
Diversification Opportunities for Vestas Wind and Siemens Aktiengesellscha
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vestas and Siemens is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and Vestas Wind 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 Vestas Wind Systems are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Vestas Wind i.e., Vestas Wind and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between Vestas Wind and Siemens Aktiengesellscha
Assuming the 90 days trading horizon Vestas Wind Systems is expected to under-perform the Siemens Aktiengesellscha. In addition to that, Vestas Wind is 1.79 times more volatile than Siemens Aktiengesellschaft. It trades about -0.03 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.06 per unit of volatility. If you would invest 12,543 in Siemens Aktiengesellschaft on August 28, 2024 and sell it today you would earn a total of 5,537 from holding Siemens Aktiengesellschaft or generate 44.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| Vestas Wind Systems |
| Siemens Aktiengesellscha |
Vestas Wind and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and Siemens Aktiengesellscha
The main advantage of trading using opposite Vestas Wind and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, Siemens Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| Vestas Wind vs. BURLINGTON STORES | Vestas Wind vs. Renesas Electronics | Vestas Wind vs. STMicroelectronics NV | Vestas Wind vs. Retail Estates NV |
| Siemens Aktiengesellscha vs. Superior Plus Corp | Siemens Aktiengesellscha vs. NMI Holdings | Siemens Aktiengesellscha vs. Origin Agritech | Siemens Aktiengesellscha vs. SIVERS SEMICONDUCTORS AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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