Correlation Between Siemens Energy and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Siemens Energy and Schneider Electric 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 Siemens Energy and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siemens Energy AG and Schneider Electric SE, you can compare the effects of market volatilities on Siemens Energy and Schneider Electric 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 Siemens Energy with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siemens Energy and Schneider Electric.
Diversification Opportunities for Siemens Energy and Schneider Electric
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siemens and Schneider is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Energy AG and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Siemens Energy 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 Siemens Energy AG are associated (or correlated) with Schneider Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider Electric has no effect on the direction of Siemens Energy i.e., Siemens Energy and Schneider Electric go up and down completely randomly.
Pair Corralation between Siemens Energy and Schneider Electric
Assuming the 90 days horizon Siemens Energy AG is expected to generate 1.28 times more return on investment than Schneider Electric. However, Siemens Energy is 1.28 times more volatile than Schneider Electric SE. It trades about 0.34 of its potential returns per unit of risk. Schneider Electric SE is currently generating about -0.09 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siemens Energy AG vs. Schneider Electric SE
Performance |
| Timeline |
| Siemens Energy AG |
| Schneider Electric |
Siemens Energy and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siemens Energy and Schneider Electric
The main advantage of trading using opposite Siemens Energy and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Energy position performs unexpectedly, Schneider Electric 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 Schneider Electric will offset losses from the drop in Schneider Electric's long position.| Siemens Energy vs. Schneider Electric SE | Siemens Energy vs. Vestas Wind Systems | Siemens Energy vs. Hillenbrand | Siemens Energy vs. Generac Holdings |
| Schneider Electric vs. SMC Corp Japan | Schneider Electric vs. Atlas Copco AB | Schneider Electric vs. Fanuc | Schneider Electric vs. Ebara Corp ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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