Correlation Between Demant A/S and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Demant A/S 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 Demant A/S and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Demant AS ADR and Siemens Healthineers AG, you can compare the effects of market volatilities on Demant A/S 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 Demant A/S with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Demant A/S and Siemens Healthineers.
Diversification Opportunities for Demant A/S and Siemens Healthineers
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Demant and Siemens is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Demant AS ADR and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Demant A/S 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 Demant AS ADR 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 Demant A/S i.e., Demant A/S and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Demant A/S and Siemens Healthineers
Assuming the 90 days horizon Demant AS ADR is expected to under-perform the Siemens Healthineers. In addition to that, Demant A/S is 1.32 times more volatile than Siemens Healthineers AG. It trades about -0.06 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 2,872 in Siemens Healthineers AG on November 28, 2024 and sell it today you would lose (16.00) from holding Siemens Healthineers AG or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Demant AS ADR vs. Siemens Healthineers AG
Performance |
| Timeline |
| Demant AS ADR |
| Siemens Healthineers |
Demant A/S and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Demant A/S and Siemens Healthineers
The main advantage of trading using opposite Demant A/S and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Demant A/S 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.| Demant A/S vs. CochLear Ltd ADR | Demant A/S vs. GN Store Nord | Demant A/S vs. GN Store Nord | Demant A/S vs. Siemens Healthineers AG |
| Siemens Healthineers vs. Merck KGaA ADR | Siemens Healthineers vs. CSL | Siemens Healthineers vs. Essilor International SA | Siemens Healthineers vs. Hoya Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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