Correlation Between SIEMENS HEALTH and Mitie Group

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

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

Diversification Opportunities for SIEMENS HEALTH and Mitie Group

0.0

Correlation Coefficient

SIEMENS HEALTH  Mitie Group

Pay attention - limited upside

The 3 months correlation between SIEMENS and Mitie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS HEALTH ADR050 and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC and SIEMENS HEALTH 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 HEALTH ADR050 are associated (or correlated) with Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of SIEMENS HEALTH i.e., SIEMENS HEALTH and Mitie Group go up and down completely randomly.

Pair Corralation between SIEMENS HEALTH and Mitie Group

If you would invest  0.00  in SIEMENS HEALTH ADR050 on December 27, 2024 and sell it today you would earn a total of  0.00  from holding SIEMENS HEALTH ADR050 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

SIEMENS HEALTH ADR050  vs.  Mitie Group PLC

SIEMENS HEALTH ADR050

Risk-Adjusted Performance

Weak

Over the last 90 days SIEMENS HEALTH ADR050 has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Mitie Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mitie Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

Pair Trading with SIEMENS HEALTH and Mitie Group

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

The idea behind SIEMENS HEALTH ADR050 and Mitie Group PLC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.