Correlation Between Trigano SA and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Trigano SA and Derichebourg 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 Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trigano SA and Derichebourg, you can compare the effects of market volatilities on Trigano SA and Derichebourg 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 Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trigano SA and Derichebourg.
Diversification Opportunities for Trigano SA and Derichebourg
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trigano and Derichebourg is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg 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 Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Trigano SA i.e., Trigano SA and Derichebourg go up and down completely randomly.
Pair Corralation between Trigano SA and Derichebourg
Assuming the 90 days trading horizon Trigano SA is expected to generate 1.15 times more return on investment than Derichebourg. However, Trigano SA is 1.15 times more volatile than Derichebourg. It trades about 0.14 of its potential returns per unit of risk. Derichebourg is currently generating about 0.05 per unit of risk. If you would invest 12,020 in Trigano SA on October 25, 2024 and sell it today you would earn a total of 530.00 from holding Trigano SA or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trigano SA vs. Derichebourg
Performance |
| Timeline |
| Trigano SA |
| Derichebourg |
Trigano SA and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trigano SA and Derichebourg
The main advantage of trading using opposite Trigano SA and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trigano SA position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Trigano SA vs. ZCCM Investments Holdings | Trigano SA vs. Jacquet Metal Service | Trigano SA vs. Exail Technologies SA | Trigano SA vs. Les Hotels Bav |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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