Correlation Between Salesforce and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Salesforce 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 Salesforce and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Schneider Electric SE, you can compare the effects of market volatilities on Salesforce 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 Salesforce with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Schneider Electric.
Diversification Opportunities for Salesforce and Schneider Electric
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Schneider is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Schneider Electric go up and down completely randomly.
Pair Corralation between Salesforce and Schneider Electric
Considering the 90-day investment horizon Salesforce is expected to generate 1.22 times more return on investment than Schneider Electric. However, Salesforce is 1.22 times more volatile than Schneider Electric SE. It trades about 0.36 of its potential returns per unit of risk. Schneider Electric SE is currently generating about -0.03 per unit of risk. If you would invest 29,377 in Salesforce on August 27, 2024 and sell it today you would earn a total of 4,825 from holding Salesforce or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Schneider Electric SE
Performance |
| Timeline |
| Salesforce |
| Schneider Electric |
Salesforce and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Schneider Electric
The main advantage of trading using opposite Salesforce and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |