Correlation Between Schneider Electric and Deutz AG
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Deutz AG 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 Deutz AG 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 Deutz AG, you can compare the effects of market volatilities on Schneider Electric and Deutz AG 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 Deutz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Deutz AG.
Diversification Opportunities for Schneider Electric and Deutz AG
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Schneider and Deutz is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Deutz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutz 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 SE are associated (or correlated) with Deutz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutz AG has no effect on the direction of Schneider Electric i.e., Schneider Electric and Deutz AG go up and down completely randomly.
Pair Corralation between Schneider Electric and Deutz AG
Assuming the 90 days trading horizon Schneider Electric SE is expected to generate 0.66 times more return on investment than Deutz AG. However, Schneider Electric SE is 1.51 times less risky than Deutz AG. It trades about 0.11 of its potential returns per unit of risk. Deutz AG is currently generating about -0.01 per unit of risk. If you would invest 23,435 in Schneider Electric SE on September 4, 2024 and sell it today you would earn a total of 865.00 from holding Schneider Electric SE or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. Deutz AG
Performance |
| Timeline |
| Schneider Electric |
| Deutz AG |
Schneider Electric and Deutz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Deutz AG
The main advantage of trading using opposite Schneider Electric and Deutz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Deutz AG 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 Deutz AG will offset losses from the drop in Deutz AG'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 |
| Deutz AG vs. SBA Communications Corp | Deutz AG vs. Shenandoah Telecommunications | Deutz AG vs. Singapore Telecommunications Limited | Deutz AG vs. Zoom Video Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |