Correlation Between Trigano SA and Passat Socit

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

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

Diversification Opportunities for Trigano SA and Passat Socit

-0.34

Correlation Coefficient

Trigano SA  Passat Socit

Very good diversification

The 3 months correlation between Trigano and Passat is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and Passat Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passat Socit Anonyme 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 Passat Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passat Socit Anonyme has no effect on the direction of Trigano SA i.e., Trigano SA and Passat Socit go up and down completely randomly.

Pair Corralation between Trigano SA and Passat Socit

Assuming the 90 days trading horizon Trigano SA is expected to generate 1.23 times more return on investment than Passat Socit. However, Trigano SA is 1.23 times more volatile than Passat Socit Anonyme. It trades about 0.11 of its potential returns per unit of risk. Passat Socit Anonyme is currently generating about -0.05 per unit of risk. 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Trigano SA  vs.  Passat Socit Anonyme

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.

Passat Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Trigano SA and Passat Socit

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

The idea behind Trigano SA and Passat Socit Anonyme 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.