Correlation Between POLENERGIA and SIEMENS ENERGY

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

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

Diversification Opportunities for POLENERGIA and SIEMENS ENERGY

-0.09

Correlation Coefficient

POLENERGIA  SIEMENS ENERGY

Good diversification

The 3 months correlation between POLENERGIA and SIEMENS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding POLENERGIA SA ZY and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG and POLENERGIA 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 POLENERGIA SA ZY are associated (or correlated) with SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of POLENERGIA i.e., POLENERGIA and SIEMENS ENERGY go up and down completely randomly.

Pair Corralation between POLENERGIA and SIEMENS ENERGY

Assuming the 90 days horizon POLENERGIA is expected to generate 10.08 times less return on investment than SIEMENS ENERGY. But when comparing it to its historical volatility, POLENERGIA SA ZY is 1.34 times less risky than SIEMENS ENERGY. It trades about 0.04 of its potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  3,200  in SIEMENS ENERGY AG on September 19, 2024 and sell it today you would earn a total of  1,900  from holding SIEMENS ENERGY AG or generate 59.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

POLENERGIA SA ZY  vs.  SIEMENS ENERGY AG

POLENERGIA SA ZY

Risk-Adjusted Performance

3 of 100

Insignificant

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

SIEMENS ENERGY AG

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SIEMENS ENERGY AG are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIEMENS ENERGY reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with POLENERGIA and SIEMENS ENERGY

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

The idea behind POLENERGIA SA ZY and SIEMENS ENERGY 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.