Correlation Between Yokogawa Electric and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Siemens Energy 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 Yokogawa Electric and Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yokogawa Electric and Siemens Energy AG, you can compare the effects of market volatilities on Yokogawa Electric and Siemens Energy 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 Yokogawa Electric with a short position of Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Siemens Energy.
Diversification Opportunities for Yokogawa Electric and Siemens Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yokogawa and Siemens is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG and Yokogawa Electric 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 Yokogawa Electric are associated (or correlated) with Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Siemens Energy go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Siemens Energy
Assuming the 90 days horizon Yokogawa Electric is expected to under-perform the Siemens Energy. In addition to that, Yokogawa Electric is 23.15 times more volatile than Siemens Energy AG. It trades about -0.09 of its total potential returns per unit of risk. Siemens Energy AG is currently generating about 0.08 per unit of volatility. If you would invest 1,729 in Siemens Energy AG on August 29, 2024 and sell it today you would earn a total of 3,426 from holding Siemens Energy AG or generate 198.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.45% |
| Values | Daily Returns |
Yokogawa Electric vs. Siemens Energy AG
Performance |
| Timeline |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Siemens Energy AG |
Yokogawa Electric and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Siemens Energy
The main advantage of trading using opposite Yokogawa Electric and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Siemens Energy 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 Energy will offset losses from the drop in Siemens Energy's long position.| Yokogawa Electric vs. Daifuku Co | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Yokogawa Electric Corp | Yokogawa Electric vs. Nidec |
| Siemens Energy vs. SPX Corp | Siemens Energy vs. Nuscale Power Corp | Siemens Energy vs. Vestas Wind Systems | Siemens Energy vs. Nordex SE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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