Correlation Between Trane Technologies and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Trane Technologies 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 Trane Technologies and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trane Technologies plc and Schneider Electric SE, you can compare the effects of market volatilities on Trane Technologies 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 Trane Technologies with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trane Technologies and Schneider Electric.
Diversification Opportunities for Trane Technologies and Schneider Electric
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trane and Schneider is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Trane Technologies plc and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Trane Technologies 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 Trane Technologies plc 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 Trane Technologies i.e., Trane Technologies and Schneider Electric go up and down completely randomly.
Pair Corralation between Trane Technologies and Schneider Electric
Assuming the 90 days horizon Trane Technologies plc is expected to under-perform the Schneider Electric. But the stock apears to be less risky and, when comparing its historical volatility, Trane Technologies plc is 1.03 times less risky than Schneider Electric. The stock trades about -0.08 of its potential returns per unit of risk. The Schneider Electric SE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24,175 in Schneider Electric SE on September 13, 2024 and sell it today you would earn a total of 115.00 from holding Schneider Electric SE or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trane Technologies plc vs. Schneider Electric SE
Performance |
| Timeline |
| Trane Technologies plc |
| Schneider Electric |
Trane Technologies and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trane Technologies and Schneider Electric
The main advantage of trading using opposite Trane Technologies and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trane Technologies 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.| Trane Technologies vs. Federal Agricultural Mortgage | Trane Technologies vs. Penta Ocean Construction Co | Trane Technologies vs. Materialise NV | Trane Technologies vs. Daito Trust Construction |
| Schneider Electric vs. SALESFORCE INC CDR | Schneider Electric vs. CARSALESCOM | Schneider Electric vs. Sims Metal Management | Schneider Electric vs. Tradeweb Markets |
Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |