Correlation Between Schneider Electric and Schneider Electric

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

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

Diversification Opportunities for Schneider Electric and Schneider Electric

0.88

Correlation Coefficient

Schneider Electric  Schneider Electric

Very poor diversification

The 3 months correlation between Schneider and Schneider is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SA and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Schneider Electric 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 Schneider Electric SA 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 Schneider Electric i.e., Schneider Electric and Schneider Electric go up and down completely randomly.

Pair Corralation between Schneider Electric and Schneider Electric

Assuming the 90 days horizon Schneider Electric is expected to generate 1.14 times less return on investment than Schneider Electric. But when comparing it to its historical volatility, Schneider Electric SA is 1.45 times less risky than Schneider Electric. It trades about 0.04 of its potential returns per unit of risk. Schneider Electric SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  24,950  in Schneider Electric SE on September 2, 2024 and sell it today you would earn a total of  650.00  from holding Schneider Electric SE or generate 2.61% return on investment over 90 days.

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

Schneider Electric SA  vs.  Schneider Electric SE

Schneider Electric

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider Electric SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Schneider Electric is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Schneider Electric

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider Electric SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Schneider Electric is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Schneider Electric and Schneider Electric

The main advantage of trading using opposite Schneider Electric and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric 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 Schneider Electric SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.