Correlation Between JE Cleantech and Schneider Electric

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

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

Diversification Opportunities for JE Cleantech and Schneider Electric

0.1

Correlation Coefficient

JE Cleantech  Schneider Electric

Average diversification

The 3 months correlation between JCSE and Schneider is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding JE Cleantech Holdings and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and JE Cleantech 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 JE Cleantech Holdings 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 JE Cleantech i.e., JE Cleantech and Schneider Electric go up and down completely randomly.

Pair Corralation between JE Cleantech and Schneider Electric

Given the investment horizon of 90 days JE Cleantech Holdings is expected to generate 4.82 times more return on investment than Schneider Electric. However, JE Cleantech is 4.82 times more volatile than Schneider Electric SE. It trades about 0.06 of its potential returns per unit of risk. Schneider Electric SE is currently generating about -0.07 per unit of risk. If you would invest  134.00  in JE Cleantech Holdings on September 26, 2024 and sell it today you would earn a total of  11.00  from holding JE Cleantech Holdings or generate 8.21% return on investment over 90 days.

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

JE Cleantech Holdings  vs.  Schneider Electric SE

JE Cleantech Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JE Cleantech Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, JE Cleantech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Schneider Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schneider Electric SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal 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 JE Cleantech and Schneider Electric

The main advantage of trading using opposite JE Cleantech and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JE Cleantech 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 JE Cleantech Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.