Correlation Between Rolls Royce and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Rolls Royce and Schneider Electric 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 Rolls Royce and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rolls Royce Holdings PLC and Schneider Electric SA, you can compare the effects of market volatilities on Rolls Royce and Schneider Electric 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 Rolls Royce with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rolls Royce and Schneider Electric.
Diversification Opportunities for Rolls Royce and Schneider Electric
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rolls and Schneider is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Rolls Royce Holdings PLC and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Rolls Royce 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 Rolls Royce Holdings PLC are associated (or correlated) with Schneider Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider Electric has no effect on the direction of Rolls Royce i.e., Rolls Royce and Schneider Electric go up and down completely randomly.
Pair Corralation between Rolls Royce and Schneider Electric
Assuming the 90 days horizon Rolls Royce Holdings PLC is expected to under-perform the Schneider Electric. In addition to that, Rolls Royce is 1.12 times more volatile than Schneider Electric SA. It trades about 0.0 of its total potential returns per unit of risk. Schneider Electric SA is currently generating about 0.04 per unit of volatility. If you would invest 5,310 in Schneider Electric SA on September 6, 2025 and sell it today you would earn a total of 182.00 from holding Schneider Electric SA or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rolls Royce Holdings PLC vs. Schneider Electric SA
Performance |
| Timeline |
| Rolls Royce Holdings |
| Schneider Electric |
Rolls Royce and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rolls Royce and Schneider Electric
The main advantage of trading using opposite Rolls Royce and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rolls Royce position performs unexpectedly, Schneider Electric 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 Schneider Electric will offset losses from the drop in Schneider Electric's long position.| Rolls Royce vs. Broadridge Financial Solutions | Rolls Royce vs. Strainsforpains | Rolls Royce vs. JB Hunt Transport | Rolls Royce vs. BOS Better Online |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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