Correlation Between American Superconductor and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both American Superconductor 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 American Superconductor and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Superconductor and Schneider Electric SA, you can compare the effects of market volatilities on American Superconductor 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 American Superconductor with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Superconductor and Schneider Electric.
Diversification Opportunities for American Superconductor and Schneider Electric
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Schneider is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding American Superconductor and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and American Superconductor 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 American Superconductor 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 American Superconductor i.e., American Superconductor and Schneider Electric go up and down completely randomly.
Pair Corralation between American Superconductor and Schneider Electric
Given the investment horizon of 90 days American Superconductor is expected to generate 3.87 times more return on investment than Schneider Electric. However, American Superconductor is 3.87 times more volatile than Schneider Electric SA. It trades about 0.1 of its potential returns per unit of risk. Schneider Electric SA is currently generating about 0.09 per unit of risk. If you would invest 358.00 in American Superconductor on September 12, 2024 and sell it today you would earn a total of 2,346 from holding American Superconductor or generate 655.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Superconductor vs. Schneider Electric SA
Performance |
| Timeline |
| American Superconductor |
| Schneider Electric |
American Superconductor and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Superconductor and Schneider Electric
The main advantage of trading using opposite American Superconductor and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Superconductor 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.| American Superconductor vs. Nel ASA | American Superconductor vs. Graham | American Superconductor vs. Watts Water Technologies | American Superconductor vs. CVD Equipment |
| Schneider Electric vs. Xinjiang Goldwind Science | Schneider Electric vs. American Superconductor | Schneider Electric vs. Cummins | Schneider Electric vs. Aquagold International |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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