Correlation Between Les Hotels and Trigano SA
Can any of the company-specific risk be diversified away by investing in both Les Hotels 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 Les Hotels and Trigano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Hotels Bav and Trigano SA, you can compare the effects of market volatilities on Les Hotels 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 Les Hotels with a short position of Trigano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Trigano SA.
Diversification Opportunities for Les Hotels and Trigano SA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Les and Trigano is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Les Hotels 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 Les Hotels Bav 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 Les Hotels i.e., Les Hotels and Trigano SA go up and down completely randomly.
Pair Corralation between Les Hotels and Trigano SA
Assuming the 90 days trading horizon Les Hotels Bav is expected to generate 0.89 times more return on investment than Trigano SA. However, Les Hotels Bav is 1.13 times less risky than Trigano SA. It trades about 0.09 of its potential returns per unit of risk. Trigano SA is currently generating about -0.01 per unit of risk. If you would invest 5,527 in Les Hotels Bav on October 25, 2024 and sell it today you would earn a total of 2,423 from holding Les Hotels Bav or generate 43.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Les Hotels Bav vs. Trigano SA
Performance |
| Timeline |
| Les Hotels Bav |
| Trigano SA |
Les Hotels and Trigano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Trigano SA
The main advantage of trading using opposite Les Hotels and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels 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.| Les Hotels vs. Les Htels de | Les Hotels vs. Moulinvest | Les Hotels vs. Bernard Loisea | Les Hotels vs. Groupimo SA |
| Trigano SA vs. ZCCM Investments Holdings | Trigano SA vs. Jacquet Metal Service | Trigano SA vs. Exail Technologies SA | Trigano SA vs. Les Hotels Bav |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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