Correlation Between Schneider Electric and Moulinvest
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Moulinvest 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 Moulinvest 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 Moulinvest, you can compare the effects of market volatilities on Schneider Electric and Moulinvest 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 Moulinvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Moulinvest.
Diversification Opportunities for Schneider Electric and Moulinvest
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schneider and Moulinvest is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest 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 Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Schneider Electric i.e., Schneider Electric and Moulinvest go up and down completely randomly.
Pair Corralation between Schneider Electric and Moulinvest
Assuming the 90 days horizon Schneider Electric SE is expected to generate 0.86 times more return on investment than Moulinvest. However, Schneider Electric SE is 1.16 times less risky than Moulinvest. It trades about -0.03 of its potential returns per unit of risk. Moulinvest is currently generating about -0.07 per unit of risk. If you would invest 24,515 in Schneider Electric SE on August 27, 2024 and sell it today you would lose (340.00) from holding Schneider Electric SE or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. Moulinvest
Performance |
| Timeline |
| Schneider Electric |
| Moulinvest |
Schneider Electric and Moulinvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Moulinvest
The main advantage of trading using opposite Schneider Electric and Moulinvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Moulinvest 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 Moulinvest will offset losses from the drop in Moulinvest's long position.| Schneider Electric vs. Air Liquide SA | Schneider Electric vs. Vinci SA | Schneider Electric vs. LOreal SA | Schneider Electric vs. Compagnie de Saint Gobain |
| Moulinvest vs. Neurones | Moulinvest vs. Aubay Socit Anonyme | Moulinvest vs. Infotel SA | Moulinvest vs. Manitou BF SA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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