Correlation Between Schneider Electric and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Vinci SA 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 Vinci SA 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 Vinci SA, you can compare the effects of market volatilities on Schneider Electric and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Vinci SA.
Diversification Opportunities for Schneider Electric and Vinci SA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Schneider and Vinci is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Vinci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA has no effect on the direction of Schneider Electric i.e., Schneider Electric and Vinci SA go up and down completely randomly.
Pair Corralation between Schneider Electric and Vinci SA
Assuming the 90 days horizon Schneider Electric SE is expected to under-perform the Vinci SA. In addition to that, Schneider Electric is 3.26 times more volatile than Vinci SA. It trades about -0.02 of its total potential returns per unit of risk. Vinci SA is currently generating about 0.24 per unit of volatility. If you would invest 9,996 in Vinci SA on November 5, 2024 and sell it today you would earn a total of 454.00 from holding Vinci SA or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Schneider Electric SE vs. Vinci SA
Performance |
| Timeline |
| Schneider Electric |
| Vinci SA |
Schneider Electric and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Vinci SA
The main advantage of trading using opposite Schneider Electric and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA'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 |
| Vinci SA vs. Air Liquide SA | Vinci SA vs. Bouygues SA | Vinci SA vs. AXA SA | Vinci SA vs. Compagnie de Saint Gobain |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets |