Correlation Between Schneider Electric and Prodways Group

Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Prodways Group 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 Prodways Group 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 Prodways Group SA, you can compare the effects of market volatilities on Schneider Electric and Prodways Group 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 Prodways Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Prodways Group.

Diversification Opportunities for Schneider Electric and Prodways Group

0.0

Correlation Coefficient

Schneider Electric  Prodways Group

Pay attention - limited upside

The 3 months correlation between Schneider and Prodways is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA 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 Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of Schneider Electric i.e., Schneider Electric and Prodways Group go up and down completely randomly.

Pair Corralation between Schneider Electric and Prodways Group

If you would invest  52.00  in Prodways Group SA on October 9, 2024 and sell it today you would earn a total of  10.00  from holding Prodways Group SA or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Schneider Electric SE  vs.  Prodways Group SA

Schneider Electric

Risk-Adjusted Performance

0 of 100

Insignificant

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

Prodways Group SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Prodways Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Prodways Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schneider Electric and Prodways Group

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

The idea behind Schneider Electric SE and Prodways Group SA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.