Correlation Between Schneider Electric and RATIONAL Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft, you can compare the effects of market volatilities on Schneider Electric and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and RATIONAL Aktiengesellscha.
Diversification Opportunities for Schneider Electric and RATIONAL Aktiengesellscha
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schneider and RATIONAL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and RATIONAL Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATIONAL Aktiengesellscha has no effect on the direction of Schneider Electric i.e., Schneider Electric and RATIONAL Aktiengesellscha go up and down completely randomly.
Pair Corralation between Schneider Electric and RATIONAL Aktiengesellscha
Assuming the 90 days trading horizon Schneider Electric SE is expected to generate 1.55 times more return on investment than RATIONAL Aktiengesellscha. However, Schneider Electric is 1.55 times more volatile than RATIONAL Aktiengesellschaft. It trades about 0.1 of its potential returns per unit of risk. RATIONAL Aktiengesellschaft is currently generating about -0.19 per unit of risk. If you would invest 24,475 in Schneider Electric SE on October 15, 2024 and sell it today you would earn a total of 570.00 from holding Schneider Electric SE or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. RATIONAL Aktiengesellschaft
Performance |
| Timeline |
| Schneider Electric |
| RATIONAL Aktiengesellscha |
Schneider Electric and RATIONAL Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and RATIONAL Aktiengesellscha
The main advantage of trading using opposite Schneider Electric and RATIONAL Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha will offset losses from the drop in RATIONAL Aktiengesellscha's long position.| Schneider Electric vs. SK TELECOM TDADR | Schneider Electric vs. Ryanair Holdings plc | Schneider Electric vs. FAIR ISAAC | Schneider Electric vs. Ribbon Communications |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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