Correlation Between NYSE Composite and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Schneider Electric SA, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Schneider Electric.
Diversification Opportunities for NYSE Composite and Schneider Electric
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Schneider is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Schneider Electric go up and down completely randomly.
Pair Corralation between NYSE Composite and Schneider Electric
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.16 times less return on investment than Schneider Electric. But when comparing it to its historical volatility, NYSE Composite is 2.38 times less risky than Schneider Electric. It trades about 0.11 of its potential returns per unit of risk. Schneider Electric SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,396 in Schneider Electric SA on August 25, 2024 and sell it today you would earn a total of 644.00 from holding Schneider Electric SA or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Schneider Electric SA
Performance |
| Timeline |
NYSE Composite and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Schneider Electric SA
Pair trading matchups for Schneider Electric
Pair Trading with NYSE Composite and Schneider Electric
The main advantage of trading using opposite NYSE Composite and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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