Correlation Between Yokogawa Electric and Siemens AG
Can any of the company-specific risk be diversified away by investing in both Yokogawa Electric and Siemens AG 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 AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yokogawa Electric Corp and Siemens AG ADR, you can compare the effects of market volatilities on Yokogawa Electric and Siemens AG 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 AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokogawa Electric and Siemens AG.
Diversification Opportunities for Yokogawa Electric and Siemens AG
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokogawa and Siemens is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yokogawa Electric Corp and Siemens AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens AG ADR 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 Corp are associated (or correlated) with Siemens AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens AG ADR has no effect on the direction of Yokogawa Electric i.e., Yokogawa Electric and Siemens AG go up and down completely randomly.
Pair Corralation between Yokogawa Electric and Siemens AG
If you would invest 3,201 in Yokogawa Electric Corp on August 26, 2024 and sell it today you would earn a total of 1,181 from holding Yokogawa Electric Corp or generate 36.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.25% |
| Values | Daily Returns |
Yokogawa Electric Corp vs. Siemens AG ADR
Performance |
| Timeline |
| Yokogawa Electric Corp |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yokogawa Electric and Siemens AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokogawa Electric and Siemens AG
The main advantage of trading using opposite Yokogawa Electric and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokogawa Electric position performs unexpectedly, Siemens AG 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 AG will offset losses from the drop in Siemens AG's long position.| Yokogawa Electric vs. Aumann AG | Yokogawa Electric vs. Arista Power | Yokogawa Electric vs. Atlas Copco AB | Yokogawa Electric vs. American Commerce Solutions |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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