Correlation Between Fanuc and Schindler Holding

Can any of the company-specific risk be diversified away by investing in both Fanuc and Schindler Holding 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 Fanuc and Schindler Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fanuc and Schindler Holding AG, you can compare the effects of market volatilities on Fanuc and Schindler Holding 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 Fanuc with a short position of Schindler Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fanuc and Schindler Holding.

Diversification Opportunities for Fanuc and Schindler Holding

-0.07

Correlation Coefficient

Fanuc  Schindler Holding

Good diversification

The 3 months correlation between Fanuc and Schindler is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fanuc and Schindler Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Holding and Fanuc 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 Fanuc are associated (or correlated) with Schindler Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Holding has no effect on the direction of Fanuc i.e., Fanuc and Schindler Holding go up and down completely randomly.

Pair Corralation between Fanuc and Schindler Holding

Assuming the 90 days horizon Fanuc is expected to under-perform the Schindler Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fanuc is 1.14 times less risky than Schindler Holding. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Schindler Holding AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  18,485  in Schindler Holding AG on September 24, 2024 and sell it today you would earn a total of  10,215  from holding Schindler Holding AG or generate 55.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.26%
Values	Daily Returns

Fanuc  vs.  Schindler Holding AG

Fanuc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fanuc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fanuc is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Schindler Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schindler Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Schindler Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fanuc and Schindler Holding

The main advantage of trading using opposite Fanuc and Schindler Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fanuc position performs unexpectedly, Schindler Holding 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 Schindler Holding will offset losses from the drop in Schindler Holding's long position.

The idea behind Fanuc and Schindler Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.