Correlation Between SIEMENS AG and Computershare

Can any of the company-specific risk be diversified away by investing in both SIEMENS AG and Computershare 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 Computershare 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 Computershare Limited, you can compare the effects of market volatilities on SIEMENS AG and Computershare 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 Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEMENS AG and Computershare.

Diversification Opportunities for SIEMENS AG and Computershare

0.57

Correlation Coefficient

SIEMENS AG  Computershare

Very weak diversification

The 3 months correlation between SIEMENS and Computershare is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SIEMENS AG SP and Computershare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare Limited 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 Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare Limited has no effect on the direction of SIEMENS AG i.e., SIEMENS AG and Computershare go up and down completely randomly.

Pair Corralation between SIEMENS AG and Computershare

Assuming the 90 days trading horizon SIEMENS AG SP is expected to under-perform the Computershare. In addition to that, SIEMENS AG is 1.81 times more volatile than Computershare Limited. It trades about -0.13 of its total potential returns per unit of risk. Computershare Limited is currently generating about 0.11 per unit of volatility. If you would invest  2,020  in Computershare Limited on October 10, 2024 and sell it today you would earn a total of  60.00  from holding Computershare Limited or generate 2.97% return on investment over 90 days.

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

SIEMENS AG SP  vs.  Computershare Limited

SIEMENS AG SP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIEMENS AG SP are ranked lower than 2 (%) 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.

Computershare Limited

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Computershare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIEMENS AG and Computershare

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

The idea behind SIEMENS AG SP and Computershare Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.