Correlation Between Siemens AG and Richtech Robotics

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

By analyzing existing cross correlation between Siemens AG Class and Richtech Robotics Class, you can compare the effects of market volatilities on Siemens AG and Richtech Robotics 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 Richtech Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens AG and Richtech Robotics.

Diversification Opportunities for Siemens AG and Richtech Robotics

-0.53

Correlation Coefficient

Siemens AG  Richtech Robotics

Excellent diversification

The 3 months correlation between Siemens and Richtech is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Siemens AG Class and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics Class 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 Class are associated (or correlated) with Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of Siemens AG i.e., Siemens AG and Richtech Robotics go up and down completely randomly.

Pair Corralation between Siemens AG and Richtech Robotics

Assuming the 90 days horizon Siemens AG Class is expected to generate 0.29 times more return on investment than Richtech Robotics. However, Siemens AG Class is 3.42 times less risky than Richtech Robotics. It trades about 0.09 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about -0.04 per unit of risk. If you would invest  18,136  in Siemens AG Class on September 6, 2024 and sell it today you would earn a total of  1,840  from holding Siemens AG Class or generate 10.15% return on investment over 90 days.

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

Siemens AG Class  vs.  Richtech Robotics Class

Siemens AG Class

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens AG Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Siemens AG may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Richtech Robotics Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Richtech Robotics Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Siemens AG and Richtech Robotics

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

The idea behind Siemens AG Class and Richtech Robotics Class 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.