Correlation Between Triumph and Safran SA
Can any of the company-specific risk be diversified away by investing in both Triumph and Safran 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 Triumph and Safran SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triumph Group and Safran SA, you can compare the effects of market volatilities on Triumph and Safran 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 Triumph with a short position of Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph and Safran SA.
Diversification Opportunities for Triumph and Safran SA
Modest diversification
The 3 months correlation between Triumph and Safran is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA and Triumph 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 Triumph Group are associated (or correlated) with Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of Triumph i.e., Triumph and Safran SA go up and down completely randomly.
Pair Corralation between Triumph and Safran SA
Considering the 90-day investment horizon Triumph Group is expected to generate 2.71 times more return on investment than Safran SA. However, Triumph is 2.71 times more volatile than Safran SA. It trades about 0.04 of its potential returns per unit of risk. Safran SA is currently generating about 0.11 per unit of risk. If you would invest 1,189 in Triumph Group on August 28, 2024 and sell it today you would earn a total of 706.00 from holding Triumph Group or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triumph Group vs. Safran SA
Performance |
| Timeline |
| Triumph Group |
| Safran SA |
Triumph and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph and Safran SA
The main advantage of trading using opposite Triumph and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph position performs unexpectedly, Safran 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 Safran SA will offset losses from the drop in Safran SA's long position.| Triumph vs. Mercury Systems | Triumph vs. Curtiss Wright | Triumph vs. Hexcel | Triumph vs. Ducommun Incorporated |
| Safran SA vs. Moog Inc | Safran SA vs. BAE Systems PLC | Safran SA vs. Park Electrochemical | Safran SA vs. Triumph Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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