Correlation Between Chargeurs and Trigano SA

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

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

Diversification Opportunities for Chargeurs and Trigano SA

-0.88

Correlation Coefficient

Chargeurs  Trigano SA

Pay attention - limited upside

The 3 months correlation between Chargeurs and Trigano is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Chargeurs 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 Chargeurs SA 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 Chargeurs i.e., Chargeurs and Trigano SA go up and down completely randomly.

Pair Corralation between Chargeurs and Trigano SA

Assuming the 90 days trading horizon Chargeurs SA is expected to under-perform the Trigano SA. But the stock apears to be less risky and, when comparing its historical volatility, Chargeurs SA is 1.26 times less risky than Trigano SA. The stock trades about -0.18 of its potential returns per unit of risk. The Trigano SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  10,362  in Trigano SA on August 31, 2024 and sell it today you would earn a total of  1,718  from holding Trigano SA or generate 16.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Chargeurs SA  vs.  Trigano SA

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chargeurs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company 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 Chargeurs and Trigano SA

The main advantage of trading using opposite Chargeurs and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs 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 Chargeurs SA 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.