Correlation Between Schneider Electric and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Atlas Copco 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 Schneider Electric and Atlas Copco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider Electric SE and Atlas Copco AB, you can compare the effects of market volatilities on Schneider Electric and Atlas Copco 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 Schneider Electric with a short position of Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Atlas Copco.
Diversification Opportunities for Schneider Electric and Atlas Copco
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schneider and Atlas is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Atlas Copco AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco AB and Schneider Electric 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 Schneider Electric SE are associated (or correlated) with Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco AB has no effect on the direction of Schneider Electric i.e., Schneider Electric and Atlas Copco go up and down completely randomly.
Pair Corralation between Schneider Electric and Atlas Copco
Assuming the 90 days horizon Schneider Electric SE is expected to generate 0.96 times more return on investment than Atlas Copco. However, Schneider Electric SE is 1.05 times less risky than Atlas Copco. It trades about 0.02 of its potential returns per unit of risk. Atlas Copco AB is currently generating about -0.01 per unit of risk. If you would invest 24,511 in Schneider Electric SE on August 29, 2024 and sell it today you would earn a total of 589.00 from holding Schneider Electric SE or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. Atlas Copco AB
Performance |
| Timeline |
| Schneider Electric |
| Atlas Copco AB |
Schneider Electric and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Atlas Copco
The main advantage of trading using opposite Schneider Electric and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Schneider Electric vs. SMC Corp Japan | Schneider Electric vs. Atlas Copco AB | Schneider Electric vs. Fanuc | Schneider Electric vs. Ebara Corp ADR |
| Atlas Copco vs. Parker Hannifin | Atlas Copco vs. Eaton PLC | Atlas Copco vs. Dover | Atlas Copco vs. Illinois Tool Works |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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