Correlation Between Entech SE and Trigano SA

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

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

Diversification Opportunities for Entech SE and Trigano SA

0.17

Correlation Coefficient

Entech SE  Trigano SA

Average diversification

The 3 months correlation between Entech and Trigano is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Entech SE SAS and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Entech SE 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 Entech SE SAS 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 Entech SE i.e., Entech SE and Trigano SA go up and down completely randomly.

Pair Corralation between Entech SE and Trigano SA

Assuming the 90 days trading horizon Entech SE SAS is expected to generate 2.54 times more return on investment than Trigano SA. However, Entech SE is 2.54 times more volatile than Trigano SA. It trades about 0.04 of its potential returns per unit of risk. Trigano SA is currently generating about 0.05 per unit of risk. If you would invest  564.00  in Entech SE SAS on October 25, 2024 and sell it today you would earn a total of  34.00  from holding Entech SE SAS or generate 6.03% return on investment over 90 days.

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

Entech SE SAS  vs.  Trigano SA

Entech SE SAS

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entech SE SAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Entech SE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Trigano SA

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Trigano SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Entech SE and Trigano SA

The main advantage of trading using opposite Entech SE and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entech SE 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 Entech SE SAS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.