Correlation Between Graco and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Graco 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 Graco and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graco Inc and Schneider Electric SE, you can compare the effects of market volatilities on Graco 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 Graco with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graco and Schneider Electric.
Diversification Opportunities for Graco and Schneider Electric
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Graco and Schneider is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Graco Inc and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Graco 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 Graco Inc 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 Graco i.e., Graco and Schneider Electric go up and down completely randomly.
Pair Corralation between Graco and Schneider Electric
Considering the 90-day investment horizon Graco Inc is expected to generate 0.53 times more return on investment than Schneider Electric. However, Graco Inc is 1.89 times less risky than Schneider Electric. It trades about 0.08 of its potential returns per unit of risk. Schneider Electric SE is currently generating about 0.02 per unit of risk. If you would invest 8,026 in Graco Inc on August 29, 2024 and sell it today you would earn a total of 1,030 from holding Graco Inc or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graco Inc vs. Schneider Electric SE
Performance |
| Timeline |
| Graco Inc |
| Schneider Electric |
Graco and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graco and Schneider Electric
The main advantage of trading using opposite Graco and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graco 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.The idea behind Graco Inc and Schneider Electric SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Schneider Electric vs. SMC Corp Japan | Schneider Electric vs. Atlas Copco AB | Schneider Electric vs. Fanuc | Schneider Electric vs. Ebara Corp ADR |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |