Correlation Between Schneider Electric and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Enerpac Tool 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 Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider Electric SA and Enerpac Tool Group, you can compare the effects of market volatilities on Schneider Electric and Enerpac Tool 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 Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Enerpac Tool.
Diversification Opportunities for Schneider Electric and Enerpac Tool
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Schneider and Enerpac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SA and Enerpac Tool Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerpac Tool Group 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 SA are associated (or correlated) with Enerpac Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerpac Tool Group has no effect on the direction of Schneider Electric i.e., Schneider Electric and Enerpac Tool go up and down completely randomly.
Pair Corralation between Schneider Electric and Enerpac Tool
Assuming the 90 days horizon Schneider Electric SA is expected to under-perform the Enerpac Tool. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schneider Electric SA is 1.65 times less risky than Enerpac Tool. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Enerpac Tool Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,412 in Enerpac Tool Group on September 1, 2024 and sell it today you would earn a total of 414.00 from holding Enerpac Tool Group or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SA vs. Enerpac Tool Group
Performance |
| Timeline |
| Schneider Electric |
| Enerpac Tool Group |
Schneider Electric and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Enerpac Tool
The main advantage of trading using opposite Schneider Electric and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Enerpac Tool 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 Enerpac Tool will offset losses from the drop in Enerpac Tool's long position.| Schneider Electric vs. GE Aerospace | Schneider Electric vs. Eaton PLC | Schneider Electric vs. Siemens AG Class | Schneider Electric vs. Parker Hannifin |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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