Correlation Between Trigano SA and Schneider Electric

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

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

Diversification Opportunities for Trigano SA and Schneider Electric

0.03

Correlation Coefficient

Trigano SA  Schneider Electric

Significant diversification

The 3 months correlation between Trigano and Schneider is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Trigano 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 Trigano SA 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 Trigano 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 Trigano SA i.e., Trigano SA and Schneider Electric go up and down completely randomly.

Pair Corralation between Trigano SA and Schneider Electric

Assuming the 90 days trading horizon Trigano SA is expected to generate 7.37 times less return on investment than Schneider Electric. In addition to that, Trigano SA is 1.07 times more volatile than Schneider Electric SE. It trades about 0.01 of its total potential returns per unit of risk. Schneider Electric SE is currently generating about 0.08 per unit of volatility. If you would invest  24,215  in Schneider Electric SE on October 22, 2024 and sell it today you would earn a total of  1,680  from holding Schneider Electric SE or generate 6.94% return on investment over 90 days.

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

Trigano SA  vs.  Schneider Electric SE

Trigano SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trigano SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Trigano SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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. Despite somewhat weak basic indicators, Schneider Electric may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Trigano SA and Schneider Electric

The main advantage of trading using opposite Trigano SA and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trigano SA 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 Trigano 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.