Correlation Between Nidec and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Nidec 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 Nidec and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidec and Schneider Electric SA, you can compare the effects of market volatilities on Nidec 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 Nidec with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Schneider Electric.
Diversification Opportunities for Nidec and Schneider Electric
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nidec and Schneider is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nidec and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Nidec 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 Nidec 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 Nidec i.e., Nidec and Schneider Electric go up and down completely randomly.
Pair Corralation between Nidec and Schneider Electric
If you would invest 5,060 in Schneider Electric SA on August 25, 2024 and sell it today you would lose (20.00) from holding Schneider Electric SA or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Nidec vs. Schneider Electric SA
Performance |
| Timeline |
| Nidec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Schneider Electric |
Nidec and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidec and Schneider Electric
The main advantage of trading using opposite Nidec and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidec 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.| Nidec vs. Daifuku Co | Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Brewbilt Manufacturing |
| Schneider Electric vs. Sandvik AB ADR | Schneider Electric vs. Ingersoll Rand | Schneider Electric vs. Fanuc | Schneider Electric vs. Nordex SE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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