Correlation Between Ion Beam and Siemens Healthineers

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

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

Diversification Opportunities for Ion Beam and Siemens Healthineers

0.44

Correlation Coefficient

Ion Beam  Siemens Healthineers

Very weak diversification

The 3 months correlation between Ion and Siemens is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Ion Beam 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 Ion Beam Applications 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 Ion Beam i.e., Ion Beam and Siemens Healthineers go up and down completely randomly.

Pair Corralation between Ion Beam and Siemens Healthineers

Assuming the 90 days horizon Ion Beam Applications is expected to under-perform the Siemens Healthineers. In addition to that, Ion Beam is 1.99 times more volatile than Siemens Healthineers AG. It trades about -0.03 of its total potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.4 per unit of volatility. If you would invest  5,120  in Siemens Healthineers AG on September 21, 2024 and sell it today you would earn a total of  463.00  from holding Siemens Healthineers AG or generate 9.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Ion Beam Applications  vs.  Siemens Healthineers AG

Ion Beam Applications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ion Beam Applications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

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. Despite nearly stable technical indicators, Siemens Healthineers is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ion Beam and Siemens Healthineers

The main advantage of trading using opposite Ion Beam and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam 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 Ion Beam Applications 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.