Correlation Between GAMESTOP and Siemens Aktiengesellscha

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

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

Diversification Opportunities for GAMESTOP and Siemens Aktiengesellscha

-0.82

Correlation Coefficient

GAMESTOP  Siemens Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between GAMESTOP and Siemens is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha and GAMESTOP 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 GAMESTOP are associated (or correlated) with Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of GAMESTOP i.e., GAMESTOP and Siemens Aktiengesellscha go up and down completely randomly.

Pair Corralation between GAMESTOP and Siemens Aktiengesellscha

Assuming the 90 days trading horizon GAMESTOP is expected to under-perform the Siemens Aktiengesellscha. In addition to that, GAMESTOP is 2.06 times more volatile than Siemens Aktiengesellschaft. It trades about -0.16 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.14 per unit of volatility. If you would invest  18,504  in Siemens Aktiengesellschaft on December 30, 2024 and sell it today you would earn a total of  2,996  from holding Siemens Aktiengesellschaft or generate 16.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GAMESTOP  vs.  Siemens Aktiengesellschaft

GAMESTOP

Risk-Adjusted Performance

Very Weak

Over the last 90 days GAMESTOP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Siemens Aktiengesellscha

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Aktiengesellschaft are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Siemens Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMESTOP and Siemens Aktiengesellscha

The main advantage of trading using opposite GAMESTOP and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP position performs unexpectedly, Siemens Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.

The idea behind GAMESTOP and Siemens Aktiengesellschaft 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.

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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.