Correlation Between Schneider Electric and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and CyberArk Software 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 CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider Electric SE and CyberArk Software, you can compare the effects of market volatilities on Schneider Electric and CyberArk Software 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 CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and CyberArk Software.
Diversification Opportunities for Schneider Electric and CyberArk Software
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schneider and CyberArk is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software 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 SE are associated (or correlated) with CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Schneider Electric i.e., Schneider Electric and CyberArk Software go up and down completely randomly.
Pair Corralation between Schneider Electric and CyberArk Software
Assuming the 90 days trading horizon Schneider Electric is expected to generate 1.53 times less return on investment than CyberArk Software. But when comparing it to its historical volatility, Schneider Electric SE is 1.51 times less risky than CyberArk Software. It trades about 0.1 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18,670 in CyberArk Software on September 4, 2024 and sell it today you would earn a total of 12,010 from holding CyberArk Software or generate 64.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. CyberArk Software
Performance |
| Timeline |
| Schneider Electric |
| CyberArk Software |
Schneider Electric and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and CyberArk Software
The main advantage of trading using opposite Schneider Electric and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, CyberArk Software 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.| Schneider Electric vs. CyberArk Software | Schneider Electric vs. COLUMBIA SPORTSWEAR | Schneider Electric vs. SPORT LISBOA E | Schneider Electric vs. NTG Nordic Transport |
| CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc | CyberArk Software vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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