Correlation Between Crane and Siemens AG
Can any of the company-specific risk be diversified away by investing in both Crane and Siemens AG 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 Crane and Siemens AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Siemens AG ADR, you can compare the effects of market volatilities on Crane and Siemens AG 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 Crane with a short position of Siemens AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Siemens AG.
Diversification Opportunities for Crane and Siemens AG
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crane and Siemens is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Siemens AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens AG ADR and Crane 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 Crane Company are associated (or correlated) with Siemens AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens AG ADR has no effect on the direction of Crane i.e., Crane and Siemens AG go up and down completely randomly.
Pair Corralation between Crane and Siemens AG
If you would invest 13,498 in Crane Company on February 1, 2024 and sell it today you would earn a total of 503.00 from holding Crane Company or generate 3.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 4.55% |
Values | Daily Returns |
Crane Company vs. Siemens AG ADR
Performance |
Timeline |
Crane Company |
Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Crane and Siemens AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Crane and Siemens AG
The main advantage of trading using opposite Crane and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Siemens AG 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 AG will offset losses from the drop in Siemens AG's long position.The idea behind Crane Company and Siemens AG ADR 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.Siemens AG vs. Sandvik AB | Siemens AG vs. Schneider Electric SA | Siemens AG vs. KONE Oyj | Siemens AG vs. Atlas Copco AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |