Correlation Between ALBIS LEASING and Schneider Electric

Can any of the company-specific risk be diversified away by investing in both ALBIS LEASING and Schneider Electric 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 ALBIS LEASING and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALBIS LEASING AG and Schneider Electric SE, you can compare the effects of market volatilities on ALBIS LEASING and Schneider Electric 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 ALBIS LEASING with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and Schneider Electric.

Diversification Opportunities for ALBIS LEASING and Schneider Electric

0.86

Correlation Coefficient

ALBIS LEASING  Schneider Electric

Very poor diversification

The 3 months correlation between ALBIS and Schneider is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with Schneider Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider Electric has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and Schneider Electric go up and down completely randomly.

Pair Corralation between ALBIS LEASING and Schneider Electric

Assuming the 90 days trading horizon ALBIS LEASING is expected to generate 1.14 times less return on investment than Schneider Electric. But when comparing it to its historical volatility, ALBIS LEASING AG is 1.45 times less risky than Schneider Electric. It trades about 0.13 of its potential returns per unit of risk. Schneider Electric SE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  17,407  in Schneider Electric SE on September 5, 2024 and sell it today you would earn a total of  6,993  from holding Schneider Electric SE or generate 40.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

ALBIS LEASING AG  vs.  Schneider Electric SE

ALBIS LEASING AG

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, ALBIS LEASING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Schneider Electric

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider Electric SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Schneider Electric may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ALBIS LEASING and Schneider Electric

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

The idea behind ALBIS LEASING AG and Schneider Electric SE 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.