Correlation Between Siemens Aktiengesellscha and Siemens Healthineers

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

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

Diversification Opportunities for Siemens Aktiengesellscha and Siemens Healthineers

0.56

Correlation Coefficient

Siemens Aktiengesellscha  Siemens Healthineers

Very weak diversification

The 3 months correlation between Siemens and Siemens is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Aktiengesellschaft and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Siemens Aktiengesellscha 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 Aktiengesellschaft are associated (or correlated) with Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Siemens Aktiengesellscha i.e., Siemens Aktiengesellscha and Siemens Healthineers go up and down completely randomly.

Pair Corralation between Siemens Aktiengesellscha and Siemens Healthineers

Assuming the 90 days trading horizon Siemens Aktiengesellschaft is expected to under-perform the Siemens Healthineers. But the stock apears to be less risky and, when comparing its historical volatility, Siemens Aktiengesellschaft is 1.09 times less risky than Siemens Healthineers. The stock trades about -0.24 of its potential returns per unit of risk. The Siemens Healthineers AG is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,236  in Siemens Healthineers AG on October 8, 2024 and sell it today you would lose (28.00) from holding Siemens Healthineers AG or give up 0.53% of portfolio value over 90 days.

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

Siemens Aktiengesellschaft  vs.  Siemens Healthineers AG

Siemens Aktiengesellscha

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Aktiengesellschaft are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Siemens Aktiengesellscha may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siemens Healthineers

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens Healthineers AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Siemens Healthineers 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 Aktiengesellscha and Siemens Healthineers

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

The idea behind Siemens Aktiengesellschaft and Siemens Healthineers AG 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.