Correlation Between Schneider Electric and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Xinjiang Goldwind 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 Xinjiang Goldwind 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 Xinjiang Goldwind Science, you can compare the effects of market volatilities on Schneider Electric and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Xinjiang Goldwind.
Diversification Opportunities for Schneider Electric and Xinjiang Goldwind
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schneider and Xinjiang is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Schneider Electric i.e., Schneider Electric and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Schneider Electric and Xinjiang Goldwind
Assuming the 90 days horizon Schneider Electric SE is expected to generate 1.03 times more return on investment than Xinjiang Goldwind. However, Schneider Electric is 1.03 times more volatile than Xinjiang Goldwind Science. It trades about -0.01 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about -0.09 per unit of risk. If you would invest 25,888 in Schneider Electric SE on September 1, 2024 and sell it today you would lose (288.00) from holding Schneider Electric SE or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Schneider Electric |
| Xinjiang Goldwind Science |
Schneider Electric and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Xinjiang Goldwind
The main advantage of trading using opposite Schneider Electric and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Schneider Electric vs. GE Aerospace | Schneider Electric vs. Eaton PLC | Schneider Electric vs. Siemens AG Class | Schneider Electric vs. Parker Hannifin |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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