Correlation Between Chongqing Machinery and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery 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 Chongqing Machinery and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and Schneider Electric SE, you can compare the effects of market volatilities on Chongqing Machinery 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 Chongqing Machinery with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Schneider Electric.
Diversification Opportunities for Chongqing Machinery and Schneider Electric
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Schneider is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Chongqing Machinery 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 Chongqing Machinery Electric 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 Chongqing Machinery i.e., Chongqing Machinery and Schneider Electric go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Schneider Electric
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 1.6 times more return on investment than Schneider Electric. However, Chongqing Machinery is 1.6 times more volatile than Schneider Electric SE. It trades about 0.2 of its potential returns per unit of risk. Schneider Electric SE is currently generating about -0.07 per unit of risk. If you would invest 7.90 in Chongqing Machinery Electric on September 12, 2024 and sell it today you would earn a total of 0.75 from holding Chongqing Machinery Electric or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Schneider Electric SE
Performance |
| Timeline |
| Chongqing Machinery |
| Schneider Electric |
Chongqing Machinery and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Schneider Electric
The main advantage of trading using opposite Chongqing Machinery and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery 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.| Chongqing Machinery vs. Schneider Electric SE | Chongqing Machinery vs. Superior Plus Corp | Chongqing Machinery vs. SIVERS SEMICONDUCTORS AB | Chongqing Machinery vs. Norsk Hydro ASA |
| Schneider Electric vs. National Retail Properties | Schneider Electric vs. CHEMICAL INDUSTRIES | Schneider Electric vs. COSTCO WHOLESALE CDR | Schneider Electric vs. Burlington Stores |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |