Correlation Between Marie Brizard and Schneider Electric

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

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

Diversification Opportunities for Marie Brizard and Schneider Electric

-0.29

Correlation Coefficient

Marie Brizard  Schneider Electric

Very good diversification

The 3 months correlation between Marie and Schneider is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Marie Brizard 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 Marie Brizard Wine 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 Marie Brizard i.e., Marie Brizard and Schneider Electric go up and down completely randomly.

Pair Corralation between Marie Brizard and Schneider Electric

Assuming the 90 days trading horizon Marie Brizard Wine is expected to under-perform the Schneider Electric. But the stock apears to be less risky and, when comparing its historical volatility, Marie Brizard Wine is 1.33 times less risky than Schneider Electric. The stock trades about -0.03 of its potential returns per unit of risk. The Schneider Electric SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  24,325  in Schneider Electric SE on October 20, 2024 and sell it today you would earn a total of  1,580  from holding Schneider Electric SE or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Marie Brizard Wine  vs.  Schneider Electric SE

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Schneider Electric

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider Electric SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Schneider Electric may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Marie Brizard and Schneider Electric

The main advantage of trading using opposite Marie Brizard and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marie Brizard 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 Marie Brizard Wine 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.