Correlation Between Schneider Electric and Biomerieux
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Biomerieux 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 Biomerieux 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 Biomerieux SA, you can compare the effects of market volatilities on Schneider Electric and Biomerieux 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 Biomerieux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Biomerieux.
Diversification Opportunities for Schneider Electric and Biomerieux
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schneider and Biomerieux is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux 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 Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of Schneider Electric i.e., Schneider Electric and Biomerieux go up and down completely randomly.
Pair Corralation between Schneider Electric and Biomerieux
Assuming the 90 days horizon Schneider Electric SE is expected to generate 0.78 times more return on investment than Biomerieux. However, Schneider Electric SE is 1.29 times less risky than Biomerieux. It trades about 0.09 of its potential returns per unit of risk. Biomerieux SA is currently generating about -0.07 per unit of risk. If you would invest 21,198 in Schneider Electric SE on March 14, 2024 and sell it today you would earn a total of 1,387 from holding Schneider Electric SE or generate 6.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Schneider Electric SE vs. Biomerieux SA
Performance |
Timeline |
Schneider Electric |
Biomerieux SA |
Schneider Electric and Biomerieux Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Schneider Electric and Biomerieux
The main advantage of trading using opposite Schneider Electric and Biomerieux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Biomerieux 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 Biomerieux will offset losses from the drop in Biomerieux's long position.Schneider Electric vs. Publicis Groupe SA | Schneider Electric vs. Pernod Ricard SA | Schneider Electric vs. Compagnie Generale des | Schneider Electric vs. Compagnie de Saint Gobain |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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