Correlation Between Esker SA and Trigano SA

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

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

Diversification Opportunities for Esker SA and Trigano SA

-0.3

Correlation Coefficient

Esker SA  Trigano SA

Very good diversification

The 3 months correlation between Esker and Trigano is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Esker SA and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Esker 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 Esker SA 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 Esker SA i.e., Esker SA and Trigano SA go up and down completely randomly.

Pair Corralation between Esker SA and Trigano SA

Assuming the 90 days trading horizon Esker SA is expected to generate 0.37 times more return on investment than Trigano SA. However, Esker SA is 2.68 times less risky than Trigano SA. It trades about 0.17 of its potential returns per unit of risk. Trigano SA is currently generating about -0.09 per unit of risk. If you would invest  26,100  in Esker SA on December 30, 2024 and sell it today you would earn a total of  1,640  from holding Esker SA or generate 6.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	69.23%
Values	Daily Returns

Esker SA  vs.  Trigano SA

Esker SA

Risk-Adjusted Performance

Good

Over the last 90 days Esker SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Esker SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Trigano SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trigano SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Esker SA and Trigano SA

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

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.