Correlation Between Nuscale Power and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Nuscale Power 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 Nuscale Power and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuscale Power Corp and Schneider Electric SA, you can compare the effects of market volatilities on Nuscale Power 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 Nuscale Power with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuscale Power and Schneider Electric.
Diversification Opportunities for Nuscale Power and Schneider Electric
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuscale and Schneider is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Nuscale Power 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 Nuscale Power Corp 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 Nuscale Power i.e., Nuscale Power and Schneider Electric go up and down completely randomly.
Pair Corralation between Nuscale Power and Schneider Electric
Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 4.85 times more return on investment than Schneider Electric. However, Nuscale Power is 4.85 times more volatile than Schneider Electric SA. It trades about 0.22 of its potential returns per unit of risk. Schneider Electric SA is currently generating about -0.12 per unit of risk. If you would invest 2,080 in Nuscale Power Corp on August 31, 2024 and sell it today you would earn a total of 726.00 from holding Nuscale Power Corp or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuscale Power Corp vs. Schneider Electric SA
Performance |
| Timeline |
| Nuscale Power Corp |
| Schneider Electric |
Nuscale Power and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuscale Power and Schneider Electric
The main advantage of trading using opposite Nuscale Power and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuscale Power 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.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
| Schneider Electric vs. GE Aerospace | Schneider Electric vs. Eaton PLC | Schneider Electric vs. Siemens AG Class | Schneider Electric vs. Schneider Electric SE |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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