Correlation Between Siemens Healthineers and SHIP HEALTHCARE

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

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

Diversification Opportunities for Siemens Healthineers and SHIP HEALTHCARE

-0.34

Correlation Coefficient

Siemens Healthineers  SHIP HEALTHCARE

Very good diversification

The 3 months correlation between Siemens and SHIP is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC and Siemens Healthineers 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 Healthineers AG are associated (or correlated) with SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Siemens Healthineers i.e., Siemens Healthineers and SHIP HEALTHCARE go up and down completely randomly.

Pair Corralation between Siemens Healthineers and SHIP HEALTHCARE

Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.59 times more return on investment than SHIP HEALTHCARE. However, Siemens Healthineers AG is 1.71 times less risky than SHIP HEALTHCARE. It trades about 0.03 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about -0.06 per unit of risk. If you would invest  4,570  in Siemens Healthineers AG on April 23, 2025 and sell it today you would earn a total of  73.00  from holding Siemens Healthineers AG or generate 1.6% return on investment over 90 days.

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

Siemens Healthineers AG  vs.  SHIP HEALTHCARE HLDGINC

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Siemens Healthineers and SHIP HEALTHCARE

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

The idea behind Siemens Healthineers AG and SHIP HEALTHCARE HLDGINC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.