Correlation Between Schneider Electric and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Hillenbrand 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 Hillenbrand 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 Hillenbrand, you can compare the effects of market volatilities on Schneider Electric and Hillenbrand 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 Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Hillenbrand.
Diversification Opportunities for Schneider Electric and Hillenbrand
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schneider and Hillenbrand is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SA and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand 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 Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Schneider Electric i.e., Schneider Electric and Hillenbrand go up and down completely randomly.
Pair Corralation between Schneider Electric and Hillenbrand
Assuming the 90 days horizon Schneider Electric SA is expected to under-perform the Hillenbrand. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schneider Electric SA is 2.54 times less risky than Hillenbrand. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Hillenbrand is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,786 in Hillenbrand on August 31, 2024 and sell it today you would earn a total of 598.00 from holding Hillenbrand or generate 21.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SA vs. Hillenbrand
Performance |
| Timeline |
| Schneider Electric |
| Hillenbrand |
Schneider Electric and Hillenbrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Hillenbrand
The main advantage of trading using opposite Schneider Electric and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.| Schneider Electric vs. GE Aerospace | Schneider Electric vs. Eaton PLC | Schneider Electric vs. Siemens AG Class | Schneider Electric vs. Schneider Electric SE |
| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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