Correlation Between Trigano SA and Claranova

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

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

Diversification Opportunities for Trigano SA and Claranova

0.05

Correlation Coefficient

Trigano SA  Claranova

Significant diversification

The 3 months correlation between Trigano and Claranova is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Trigano SA 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 Trigano SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Trigano SA i.e., Trigano SA and Claranova go up and down completely randomly.

Pair Corralation between Trigano SA and Claranova

Assuming the 90 days trading horizon Trigano SA is expected to generate 0.79 times more return on investment than Claranova. However, Trigano SA is 1.26 times less risky than Claranova. It trades about -0.03 of its potential returns per unit of risk. Claranova SE is currently generating about -0.09 per unit of risk. If you would invest  13,553  in Trigano SA on September 2, 2024 and sell it today you would lose (1,643) from holding Trigano SA or give up 12.12% of portfolio value over 90 days.

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

Trigano SA  vs.  Claranova SE

Trigano SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 7 (%) 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.

Claranova SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Claranova SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Claranova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Trigano SA and Claranova

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

The idea behind Trigano SA and Claranova SE 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.