Correlation Between IQVIA Holdings and SIEMENS HEALTH

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

By analyzing existing cross correlation between IQVIA Holdings and SIEMENS HEALTH ADR050, you can compare the effects of market volatilities on IQVIA Holdings 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 IQVIA Holdings with a short position of SIEMENS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQVIA Holdings and SIEMENS HEALTH.

Diversification Opportunities for IQVIA Holdings and SIEMENS HEALTH

0.2

Correlation Coefficient

IQVIA Holdings  SIEMENS HEALTH

Modest diversification

The 3 months correlation between IQVIA and SIEMENS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings 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 IQVIA 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 IQVIA Holdings 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 IQVIA Holdings i.e., IQVIA Holdings and SIEMENS HEALTH go up and down completely randomly.

Pair Corralation between IQVIA Holdings and SIEMENS HEALTH

Assuming the 90 days horizon IQVIA Holdings is expected to generate 5.17 times less return on investment than SIEMENS HEALTH. In addition to that, IQVIA Holdings is 1.01 times more volatile than SIEMENS HEALTH ADR050. It trades about 0.01 of its total potential returns per unit of risk. SIEMENS HEALTH ADR050 is currently generating about 0.03 per unit of volatility. If you would invest  2,195  in SIEMENS HEALTH ADR050 on September 12, 2024 and sell it today you would earn a total of  325.00  from holding SIEMENS HEALTH ADR050 or generate 14.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

IQVIA Holdings  vs.  SIEMENS HEALTH ADR050

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SIEMENS HEALTH ADR050

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIEMENS HEALTH ADR050 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SIEMENS HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IQVIA Holdings and SIEMENS HEALTH

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

The idea behind IQVIA Holdings and SIEMENS HEALTH ADR050 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.