Correlation Between Schneider Electric and Ushio
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Ushio 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 Ushio 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 Ushio Inc, you can compare the effects of market volatilities on Schneider Electric and Ushio 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 Ushio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Ushio.
Diversification Opportunities for Schneider Electric and Ushio
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schneider and Ushio is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SA and Ushio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ushio Inc 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 Ushio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ushio Inc has no effect on the direction of Schneider Electric i.e., Schneider Electric and Ushio go up and down completely randomly.
Pair Corralation between Schneider Electric and Ushio
Assuming the 90 days horizon Schneider Electric SA is expected to generate 4.0 times more return on investment than Ushio. However, Schneider Electric is 4.0 times more volatile than Ushio Inc. It trades about 0.01 of its potential returns per unit of risk. Ushio Inc is currently generating about -0.19 per unit of risk. If you would invest 5,084 in Schneider Electric SA on September 5, 2024 and sell it today you would earn a total of 9.00 from holding Schneider Electric SA or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SA vs. Ushio Inc
Performance |
| Timeline |
| Schneider Electric |
| Ushio Inc |
Schneider Electric and Ushio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Ushio
The main advantage of trading using opposite Schneider Electric and Ushio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Ushio 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 Ushio will offset losses from the drop in Ushio's long position.| Schneider Electric vs. Dear Cashmere Holding | Schneider Electric vs. Goff Corp | Schneider Electric vs. Wialan Technologies | Schneider Electric vs. Cgrowth Capital |
| Ushio vs. Dear Cashmere Holding | Ushio vs. Goff Corp | Ushio vs. Wialan Technologies | Ushio vs. Cgrowth Capital |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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