Correlation Between SIEMENS AG and FANUC PUNSPADR

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

By analyzing existing cross correlation between SIEMENS AG SP and FANUC PUNSPADR 110, you can compare the effects of market volatilities on SIEMENS AG and FANUC PUNSPADR 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 AG with a short position of FANUC PUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS AG and FANUC PUNSPADR.

Diversification Opportunities for SIEMENS AG and FANUC PUNSPADR

-0.01

Correlation Coefficient

SIEMENS AG  FANUC PUNSPADR

Good diversification

The 3 months correlation between SIEMENS and FANUC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS AG SP and FANUC PUNSPADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANUC PUNSPADR 110 and SIEMENS AG 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 AG SP are associated (or correlated) with FANUC PUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANUC PUNSPADR 110 has no effect on the direction of SIEMENS AG i.e., SIEMENS AG and FANUC PUNSPADR go up and down completely randomly.

Pair Corralation between SIEMENS AG and FANUC PUNSPADR

Assuming the 90 days trading horizon SIEMENS AG SP is expected to generate 0.73 times more return on investment than FANUC PUNSPADR. However, SIEMENS AG SP is 1.38 times less risky than FANUC PUNSPADR. It trades about 0.04 of its potential returns per unit of risk. FANUC PUNSPADR 110 is currently generating about 0.0 per unit of risk. If you would invest  8,800  in SIEMENS AG SP on September 27, 2024 and sell it today you would earn a total of  550.00  from holding SIEMENS AG SP or generate 6.25% return on investment over 90 days.

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

SIEMENS AG SP  vs.  FANUC PUNSPADR 110

SIEMENS AG SP

Risk-Adjusted Performance

3 of 100

Insignificant

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

FANUC PUNSPADR 110

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANUC PUNSPADR 110 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental 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 AG and FANUC PUNSPADR

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

The idea behind SIEMENS AG SP and FANUC PUNSPADR 110 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.