Correlation Between Rockwell Automation and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Rockwell Automation 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 Rockwell Automation and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwell Automation and Schneider Electric SE, you can compare the effects of market volatilities on Rockwell Automation 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 Rockwell Automation with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwell Automation and Schneider Electric.
Diversification Opportunities for Rockwell Automation and Schneider Electric
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rockwell and Schneider is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Rockwell Automation 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 Rockwell Automation 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 Rockwell Automation i.e., Rockwell Automation and Schneider Electric go up and down completely randomly.
Pair Corralation between Rockwell Automation and Schneider Electric
Considering the 90-day investment horizon Rockwell Automation is expected to generate 1.91 times less return on investment than Schneider Electric. But when comparing it to its historical volatility, Rockwell Automation is 1.15 times less risky than Schneider Electric. It trades about 0.02 of its potential returns per unit of risk. Schneider Electric SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 22,945 in Schneider Electric SE on August 29, 2024 and sell it today you would earn a total of 2,155 from holding Schneider Electric SE or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockwell Automation vs. Schneider Electric SE
Performance |
| Timeline |
| Rockwell Automation |
| Schneider Electric |
Rockwell Automation and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwell Automation and Schneider Electric
The main advantage of trading using opposite Rockwell Automation and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation 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.| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton PLC |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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