Correlation Between WuXi AppTec and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec 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 WuXi AppTec and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and Siemens Healthineers AG, you can compare the effects of market volatilities on WuXi AppTec 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 WuXi AppTec with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and Siemens Healthineers.
Diversification Opportunities for WuXi AppTec and Siemens Healthineers
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WuXi and Siemens is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and WuXi AppTec 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 WuXi AppTec Co 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 WuXi AppTec i.e., WuXi AppTec and Siemens Healthineers go up and down completely randomly.
Pair Corralation between WuXi AppTec and Siemens Healthineers
Assuming the 90 days horizon WuXi AppTec Co is expected to generate 3.44 times more return on investment than Siemens Healthineers. However, WuXi AppTec is 3.44 times more volatile than Siemens Healthineers AG. It trades about 0.02 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.02 per unit of risk. If you would invest 753.00 in WuXi AppTec Co on October 15, 2024 and sell it today you would lose (103.00) from holding WuXi AppTec Co or give up 13.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi AppTec Co vs. Siemens Healthineers AG
Performance |
| Timeline |
| WuXi AppTec |
| Siemens Healthineers |
WuXi AppTec and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and Siemens Healthineers
The main advantage of trading using opposite WuXi AppTec and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec 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.| WuXi AppTec vs. Thermo Fisher Scientific | WuXi AppTec vs. Danaher | WuXi AppTec vs. Siemens Healthineers AG | WuXi AppTec vs. Agilent Technologies |
| Siemens Healthineers vs. TT Electronics PLC | Siemens Healthineers vs. Samsung Electronics Co | Siemens Healthineers vs. JLF INVESTMENT | Siemens Healthineers vs. STMICROELECTRONICS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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