Correlation Between Procter Gamble and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Schneider Electric SE, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Schneider Electric.
Diversification Opportunities for Procter Gamble and Schneider Electric
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Procter and Schneider is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Schneider Electric go up and down completely randomly.
Pair Corralation between Procter Gamble and Schneider Electric
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.63 times more return on investment than Schneider Electric. However, Procter Gamble is 1.58 times less risky than Schneider Electric. It trades about 0.06 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 16,119 in Procter Gamble on August 24, 2024 and sell it today you would earn a total of 1,156 from holding Procter Gamble or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Procter Gamble vs. Schneider Electric SE
Performance |
| Timeline |
| Procter Gamble |
| Schneider Electric |
Procter Gamble and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Schneider Electric
The main advantage of trading using opposite Procter Gamble and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Honest Company | Procter Gamble vs. Hims Hers Health | Procter Gamble vs. Kimberly Clark | Procter Gamble vs. Colgate Palmolive |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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