Correlation Between Schneider Electric and KONE Oyj
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and KONE Oyj 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 KONE Oyj 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 KONE Oyj, you can compare the effects of market volatilities on Schneider Electric and KONE Oyj 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 KONE Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and KONE Oyj.
Diversification Opportunities for Schneider Electric and KONE Oyj
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schneider and KONE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and KONE Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KONE Oyj 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 KONE Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KONE Oyj has no effect on the direction of Schneider Electric i.e., Schneider Electric and KONE Oyj go up and down completely randomly.
Pair Corralation between Schneider Electric and KONE Oyj
Assuming the 90 days horizon Schneider Electric SE is expected to generate 1.23 times more return on investment than KONE Oyj. However, Schneider Electric is 1.23 times more volatile than KONE Oyj. It trades about 0.05 of its potential returns per unit of risk. KONE Oyj is currently generating about 0.01 per unit of risk. If you would invest 22,075 in Schneider Electric SE on August 25, 2024 and sell it today you would earn a total of 3,375 from holding Schneider Electric SE or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. KONE Oyj
Performance |
| Timeline |
| Schneider Electric |
| KONE Oyj |
Schneider Electric and KONE Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and KONE Oyj
The main advantage of trading using opposite Schneider Electric and KONE Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, KONE Oyj 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 KONE Oyj will offset losses from the drop in KONE Oyj'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 |
| KONE Oyj vs. Spirax Sarco Engineering PLC | KONE Oyj vs. Atlas Copco ADR | KONE Oyj vs. Vestas Wind Systems | KONE Oyj vs. IDEX Corporation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |