Correlation Between Generac Holdings and Siemens AG

Can any of the company-specific risk be diversified away by investing in both Generac Holdings 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 Generac Holdings and Siemens AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generac Holdings and Siemens AG ADR, you can compare the effects of market volatilities on Generac Holdings 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 Generac Holdings with a short position of Siemens AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generac Holdings and Siemens AG.

Diversification Opportunities for Generac Holdings and Siemens AG

0.0

Correlation Coefficient

Generac Holdings  Siemens AG

Pay attention - limited upside

The 3 months correlation between Generac and Siemens is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Generac Holdings 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 Generac Holdings 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 Generac Holdings 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 Generac Holdings i.e., Generac Holdings and Siemens AG go up and down completely randomly.

Pair Corralation between Generac Holdings and Siemens AG

If you would invest (100.00) in Siemens AG ADR on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Siemens AG ADR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Generac Holdings  vs.  Siemens AG ADR

Generac Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Generac Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Siemens AG ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siemens AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Siemens AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Generac Holdings and Siemens AG

The main advantage of trading using opposite Generac Holdings and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generac Holdings 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.

The idea behind Generac Holdings and Siemens AG ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.