Correlation Between Atlas Copco and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Atlas Copco 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 Atlas Copco and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Copco A and Schneider Electric SE, you can compare the effects of market volatilities on Atlas Copco 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 Atlas Copco with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Copco and Schneider Electric.
Diversification Opportunities for Atlas Copco and Schneider Electric
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Atlas and Schneider is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Copco A and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Atlas Copco 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 Atlas Copco A 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 Atlas Copco i.e., Atlas Copco and Schneider Electric go up and down completely randomly.
Pair Corralation between Atlas Copco and Schneider Electric
Assuming the 90 days horizon Atlas Copco A is expected to under-perform the Schneider Electric. But the stock apears to be less risky and, when comparing its historical volatility, Atlas Copco A is 1.09 times less risky than Schneider Electric. The stock trades about -0.01 of its potential returns per unit of risk. The Schneider Electric SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 23,435 in Schneider Electric SE on September 3, 2024 and sell it today you would earn a total of 925.00 from holding Schneider Electric SE or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Copco A vs. Schneider Electric SE
Performance |
| Timeline |
| Atlas Copco A |
| Schneider Electric |
Atlas Copco and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Copco and Schneider Electric
The main advantage of trading using opposite Atlas Copco and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Copco 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.| Atlas Copco vs. LG Electronics | Atlas Copco vs. Applied Materials | Atlas Copco vs. Goodyear Tire Rubber | Atlas Copco vs. UET United Electronic |
| Schneider Electric vs. SIEMENS AG SP | Schneider Electric vs. Siemens Aktiengesellschaft | Schneider Electric vs. Siemens Aktiengesellschaft | Schneider Electric vs. Atlas Copco A |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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