Correlation Between URBAN OUTFITTERS and Siemens Healthineers

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

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

Diversification Opportunities for URBAN OUTFITTERS and Siemens Healthineers

0.05

Correlation Coefficient

URBAN OUTFITTERS  Siemens Healthineers

Significant diversification

The 3 months correlation between URBAN and Siemens is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding URBAN OUTFITTERS and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS i.e., URBAN OUTFITTERS and Siemens Healthineers go up and down completely randomly.

Pair Corralation between URBAN OUTFITTERS and Siemens Healthineers

Assuming the 90 days trading horizon URBAN OUTFITTERS is expected to under-perform the Siemens Healthineers. In addition to that, URBAN OUTFITTERS is 1.78 times more volatile than Siemens Healthineers AG. It trades about -0.08 of its total potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.04 per unit of volatility. If you would invest  5,130  in Siemens Healthineers AG on December 22, 2024 and sell it today you would earn a total of  132.00  from holding Siemens Healthineers AG or generate 2.57% return on investment over 90 days.

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

URBAN OUTFITTERS  vs.  Siemens Healthineers AG

URBAN OUTFITTERS

Risk-Adjusted Performance

Very Weak

Over the last 90 days URBAN OUTFITTERS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Siemens Healthineers

Risk-Adjusted Performance

Weak

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

Pair Trading with URBAN OUTFITTERS and Siemens Healthineers

The main advantage of trading using opposite URBAN OUTFITTERS and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.