Correlation Between Brewbilt Manufacturing and Siemens AG

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

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

Diversification Opportunities for Brewbilt Manufacturing and Siemens AG

-0.13

Correlation Coefficient

Brewbilt Manufacturing  Siemens AG

Good diversification

The 3 months correlation between Brewbilt and Siemens is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brewbilt Manufacturing and Siemens AG Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens AG Class and Brewbilt Manufacturing 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 Brewbilt Manufacturing 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 Class has no effect on the direction of Brewbilt Manufacturing i.e., Brewbilt Manufacturing and Siemens AG go up and down completely randomly.

Pair Corralation between Brewbilt Manufacturing and Siemens AG

Given the investment horizon of 90 days Brewbilt Manufacturing is expected to generate 27.13 times more return on investment than Siemens AG. However, Brewbilt Manufacturing is 27.13 times more volatile than Siemens AG Class. It trades about 0.08 of its potential returns per unit of risk. Siemens AG Class is currently generating about 0.06 per unit of risk. If you would invest  465.00  in Brewbilt Manufacturing on February 4, 2024 and sell it today you would lose (464.99) from holding Brewbilt Manufacturing or give up 100.0% of portfolio value over 90 days.

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

Brewbilt Manufacturing  vs.  Siemens AG Class

Brewbilt Manufacturing

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brewbilt Manufacturing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Brewbilt Manufacturing showed solid returns over the last few months and may actually be approaching a breakup point.

Siemens AG Class

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siemens AG Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Siemens AG may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Brewbilt Manufacturing and Siemens AG

The main advantage of trading using opposite Brewbilt Manufacturing and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brewbilt Manufacturing 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 Brewbilt Manufacturing and Siemens AG 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.