Correlation Between Schneider Electric and FANUC PUNSPADR

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

By analyzing existing cross correlation between Schneider Electric SE and FANUC PUNSPADR 110, you can compare the effects of market volatilities on Schneider Electric and FANUC PUNSPADR 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 FANUC PUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and FANUC PUNSPADR.

Diversification Opportunities for Schneider Electric and FANUC PUNSPADR

-0.12

Correlation Coefficient

Schneider Electric  FANUC PUNSPADR

Good diversification

The 3 months correlation between Schneider and FANUC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and FANUC PUNSPADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANUC PUNSPADR 110 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 SE are associated (or correlated) with FANUC PUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANUC PUNSPADR 110 has no effect on the direction of Schneider Electric i.e., Schneider Electric and FANUC PUNSPADR go up and down completely randomly.

Pair Corralation between Schneider Electric and FANUC PUNSPADR

Assuming the 90 days trading horizon Schneider Electric SE is expected to generate 0.66 times more return on investment than FANUC PUNSPADR. However, Schneider Electric SE is 1.52 times less risky than FANUC PUNSPADR. It trades about 0.04 of its potential returns per unit of risk. FANUC PUNSPADR 110 is currently generating about 0.0 per unit of risk. If you would invest  22,545  in Schneider Electric SE on September 27, 2024 and sell it today you would earn a total of  1,375  from holding Schneider Electric SE or generate 6.1% return on investment over 90 days.

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

Schneider Electric SE  vs.  FANUC PUNSPADR 110

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. In spite of comparatively stable fundamental indicators, Schneider Electric is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FANUC PUNSPADR 110

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANUC PUNSPADR 110 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental 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 Schneider Electric and FANUC PUNSPADR

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

The idea behind Schneider Electric SE and FANUC PUNSPADR 110 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.