Correlation Between Grolleau SAS and Trigano SA

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

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

Diversification Opportunities for Grolleau SAS and Trigano SA

-0.87

Correlation Coefficient

Grolleau SAS  Trigano SA

Pay attention - limited upside

The 3 months correlation between Grolleau and Trigano is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Grolleau SAS and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Grolleau SAS 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 Grolleau SAS are associated (or correlated) with Trigano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigano SA has no effect on the direction of Grolleau SAS i.e., Grolleau SAS and Trigano SA go up and down completely randomly.

Pair Corralation between Grolleau SAS and Trigano SA

Assuming the 90 days trading horizon Grolleau SAS is expected to under-perform the Trigano SA. In addition to that, Grolleau SAS is 1.26 times more volatile than Trigano SA. It trades about -0.11 of its total potential returns per unit of risk. Trigano SA is currently generating about 0.11 per unit of volatility. If you would invest  10,175  in Trigano SA on September 3, 2024 and sell it today you would earn a total of  1,735  from holding Trigano SA or generate 17.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Grolleau SAS  vs.  Trigano SA

Grolleau SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grolleau SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Trigano SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Trigano SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grolleau SAS and Trigano SA

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

The idea behind Grolleau SAS and Trigano SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.