Correlation Between WuXi AppTec and SIEMENS HEALTH
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec and SIEMENS HEALTH 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 HEALTH 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 HEALTH ADR050, you can compare the effects of market volatilities on WuXi AppTec and SIEMENS HEALTH 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 HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and SIEMENS HEALTH.
Diversification Opportunities for WuXi AppTec and SIEMENS HEALTH
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WuXi and SIEMENS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and SIEMENS HEALTH ADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS HEALTH ADR050 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 HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS HEALTH ADR050 has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and SIEMENS HEALTH go up and down completely randomly.
Pair Corralation between WuXi AppTec and SIEMENS HEALTH
Assuming the 90 days horizon WuXi AppTec Co is expected to generate 2.69 times more return on investment than SIEMENS HEALTH. However, WuXi AppTec is 2.69 times more volatile than SIEMENS HEALTH ADR050. It trades about 0.02 of its potential returns per unit of risk. SIEMENS HEALTH ADR050 is currently generating about 0.02 per unit of risk. If you would invest 684.00 in WuXi AppTec Co on September 28, 2024 and sell it today you would lose (4.00) from holding WuXi AppTec Co or give up 0.58% 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 HEALTH ADR050
Performance |
| Timeline |
| WuXi AppTec |
| SIEMENS HEALTH ADR050 |
WuXi AppTec and SIEMENS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and SIEMENS HEALTH
The main advantage of trading using opposite WuXi AppTec and SIEMENS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, SIEMENS HEALTH 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 HEALTH will offset losses from the drop in SIEMENS HEALTH's long position.| WuXi AppTec vs. Danaher | WuXi AppTec vs. Danaher | WuXi AppTec vs. SIEMENS HEALTH ADR050 | WuXi AppTec vs. Siemens Healthineers AG |
| SIEMENS HEALTH vs. WuXi AppTec Co | SIEMENS HEALTH vs. Danaher | SIEMENS HEALTH vs. Danaher | SIEMENS HEALTH vs. Siemens Healthineers AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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