Correlation Between Sidetrade and Trigano SA

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

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

Diversification Opportunities for Sidetrade and Trigano SA

0.81

Correlation Coefficient

Sidetrade  Trigano SA

Very poor diversification

The 3 months correlation between Sidetrade and Trigano is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sidetrade and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Sidetrade 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 Sidetrade 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 Sidetrade i.e., Sidetrade and Trigano SA go up and down completely randomly.

Pair Corralation between Sidetrade and Trigano SA

Assuming the 90 days trading horizon Sidetrade is expected to generate 1.86 times less return on investment than Trigano SA. But when comparing it to its historical volatility, Sidetrade is 1.1 times less risky than Trigano SA. It trades about 0.06 of its potential returns per unit of risk. Trigano SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  10,362  in Trigano SA on September 2, 2024 and sell it today you would earn a total of  1,548  from holding Trigano SA or generate 14.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sidetrade  vs.  Trigano SA

Sidetrade

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sidetrade are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sidetrade may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Trigano SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 7 (%) 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.

Pair Trading with Sidetrade and Trigano SA

The main advantage of trading using opposite Sidetrade and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidetrade 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.

The idea behind Sidetrade and Trigano SA 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.