Correlation Between Balyo SA and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Balyo 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 Balyo 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 Balyo SA and Schneider Electric SE, you can compare the effects of market volatilities on Balyo 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 Balyo SA with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balyo SA and Schneider Electric.
Diversification Opportunities for Balyo SA and Schneider Electric
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Balyo and Schneider is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Balyo 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 Balyo 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 Balyo 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 Balyo SA i.e., Balyo SA and Schneider Electric go up and down completely randomly.
Pair Corralation between Balyo SA and Schneider Electric
Assuming the 90 days trading horizon Balyo SA is expected to under-perform the Schneider Electric. In addition to that, Balyo SA is 2.44 times more volatile than Schneider Electric SE. It trades about -0.27 of its total potential returns per unit of risk. Schneider Electric SE is currently generating about 0.06 per unit of volatility. If you would invest 22,690 in Schneider Electric SE on August 23, 2024 and sell it today you would earn a total of 1,320 from holding Schneider Electric SE or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balyo SA vs. Schneider Electric SE
Performance |
| Timeline |
| Balyo SA |
| Schneider Electric |
Balyo SA and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balyo SA and Schneider Electric
The main advantage of trading using opposite Balyo SA and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balyo 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.| Balyo SA vs. Prodways Group SA | Balyo SA vs. Claranova SE | Balyo SA vs. DBV Technologies SA | Balyo SA vs. Manitou BF SA |
| Schneider Electric vs. Air Liquide SA | Schneider Electric vs. Vinci SA | Schneider Electric vs. LOreal SA | Schneider Electric vs. Compagnie de Saint Gobain |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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