Correlation Between Siemens Healthineers and Semperit Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Siemens Healthineers and Semperit 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 Siemens Healthineers and Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on Siemens Healthineers and Semperit 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 Siemens Healthineers with a short position of Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Healthineers and Semperit Aktiengesellscha.

Diversification Opportunities for Siemens Healthineers and Semperit Aktiengesellscha

0.54

Correlation Coefficient

Siemens Healthineers  Semperit Aktiengesellscha

Very weak diversification

The 3 months correlation between Siemens and Semperit is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between Siemens Healthineers and Semperit Aktiengesellscha

Assuming the 90 days horizon Siemens Healthineers is expected to generate 4.87 times less return on investment than Semperit Aktiengesellscha. But when comparing it to its historical volatility, Siemens Healthineers AG is 1.12 times less risky than Semperit Aktiengesellscha. It trades about 0.05 of its potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,178  in Semperit Aktiengesellschaft Holding on December 21, 2024 and sell it today you would earn a total of  248.00  from holding Semperit Aktiengesellschaft Holding or generate 21.05% 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.  Semperit Aktiengesellschaft Ho

Siemens Healthineers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Healthineers AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Siemens Healthineers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Semperit Aktiengesellscha

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Semperit Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siemens Healthineers and Semperit Aktiengesellscha

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

The idea behind Siemens Healthineers AG and Semperit Aktiengesellschaft Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.