Correlation Between Schneider Electric and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Siemens Energy 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 Siemens Energy 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 Siemens Energy AG, you can compare the effects of market volatilities on Schneider Electric and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Siemens Energy.
Diversification Opportunities for Schneider Electric and Siemens Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Schneider and Siemens is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SA and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG 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 Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Schneider Electric i.e., Schneider Electric and Siemens Energy go up and down completely randomly.
Pair Corralation between Schneider Electric and Siemens Energy
Assuming the 90 days horizon Schneider Electric SA is expected to under-perform the Siemens Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schneider Electric SA is 2.0 times less risky than Siemens Energy. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,150 in Siemens Energy AG on August 31, 2024 and sell it today you would earn a total of 1,008 from holding Siemens Energy AG or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SA vs. Siemens Energy AG
Performance |
| Timeline |
| Schneider Electric |
| Siemens Energy AG |
Schneider Electric and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Siemens Energy
The main advantage of trading using opposite Schneider Electric and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy'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 |
| Siemens Energy vs. Schneider Electric SE | Siemens Energy vs. Vestas Wind Systems | Siemens Energy vs. Hillenbrand | Siemens Energy vs. Generac Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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