Correlation Between Siemens Healthineers and DATAGROUP

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

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

Diversification Opportunities for Siemens Healthineers and DATAGROUP

0.5

Correlation Coefficient

Siemens Healthineers  DATAGROUP

Very weak diversification

The 3 months correlation between Siemens and DATAGROUP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and Siemens Healthineers 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 Siemens Healthineers AG are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and DATAGROUP go up and down completely randomly.

Pair Corralation between Siemens Healthineers and DATAGROUP

Assuming the 90 days trading horizon Siemens Healthineers AG is expected to generate 0.61 times more return on investment than DATAGROUP. However, Siemens Healthineers AG is 1.65 times less risky than DATAGROUP. It trades about 0.07 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.02 per unit of risk. If you would invest  5,122  in Siemens Healthineers AG on October 25, 2024 and sell it today you would earn a total of  318.00  from holding Siemens Healthineers AG or generate 6.21% return on investment over 90 days.

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

Siemens Healthineers AG  vs.  DATAGROUP SE

Siemens Healthineers

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Healthineers AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Siemens Healthineers may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DATAGROUP SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, DATAGROUP is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Siemens Healthineers and DATAGROUP

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

The idea behind Siemens Healthineers AG and DATAGROUP SE 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.