Correlation Between Trigano SA and Chargeurs

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

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

Diversification Opportunities for Trigano SA and Chargeurs

-0.88

Correlation Coefficient

Trigano SA  Chargeurs

Pay attention - limited upside

The 3 months correlation between Trigano and Chargeurs is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and Chargeurs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chargeurs SA 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 Chargeurs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chargeurs SA has no effect on the direction of Trigano SA i.e., Trigano SA and Chargeurs go up and down completely randomly.

Pair Corralation between Trigano SA and Chargeurs

Assuming the 90 days trading horizon Trigano SA is expected to under-perform the Chargeurs. But the stock apears to be less risky and, when comparing its historical volatility, Trigano SA is 1.21 times less risky than Chargeurs. The stock trades about -0.1 of its potential returns per unit of risk. The Chargeurs SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  924.00  in Chargeurs SA on August 31, 2024 and sell it today you would earn a total of  65.00  from holding Chargeurs SA or generate 7.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Trigano SA  vs.  Chargeurs SA

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.

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.

Pair Trading with Trigano SA and Chargeurs

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

The idea behind Trigano SA and Chargeurs 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.