Correlation Between Veolia Environnement and Trigano SA
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement 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 Veolia Environnement and Trigano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement VE and Trigano SA, you can compare the effects of market volatilities on Veolia Environnement 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 Veolia Environnement with a short position of Trigano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Trigano SA.
Diversification Opportunities for Veolia Environnement and Trigano SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Veolia and Trigano is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and Trigano SA go up and down completely randomly.
Pair Corralation between Veolia Environnement and Trigano SA
Assuming the 90 days trading horizon Veolia Environnement VE is expected to under-perform the Trigano SA. But the stock apears to be less risky and, when comparing its historical volatility, Veolia Environnement VE is 1.42 times less risky than Trigano SA. The stock trades about -0.27 of its potential returns per unit of risk. The Trigano SA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 12,390 in Trigano SA on August 31, 2024 and sell it today you would lose (310.00) from holding Trigano SA or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement VE vs. Trigano SA
Performance |
| Timeline |
| Veolia Environnement |
| Trigano SA |
Veolia Environnement and Trigano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Trigano SA
The main advantage of trading using opposite Veolia Environnement and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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.| Veolia Environnement vs. Vinci SA | Veolia Environnement vs. Compagnie de Saint Gobain | Veolia Environnement vs. Bouygues SA | Veolia Environnement vs. Engie SA |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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