Correlation Between Icape Holding and Trigano SA

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

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

Diversification Opportunities for Icape Holding and Trigano SA

-0.5

Correlation Coefficient

Icape Holding  Trigano SA

Very good diversification

The 3 months correlation between Icape and Trigano is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Icape Holding and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Icape Holding 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 Icape Holding 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 Icape Holding i.e., Icape Holding and Trigano SA go up and down completely randomly.

Pair Corralation between Icape Holding and Trigano SA

Assuming the 90 days trading horizon Icape Holding is expected to generate 4.97 times more return on investment than Trigano SA. However, Icape Holding is 4.97 times more volatile than Trigano SA. It trades about 0.24 of its potential returns per unit of risk. Trigano SA is currently generating about 0.02 per unit of risk. If you would invest  748.00  in Icape Holding on October 7, 2024 and sell it today you would earn a total of  190.00  from holding Icape Holding or generate 25.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Icape Holding  vs.  Trigano SA

Icape Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icape Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Icape Holding may actually be approaching a critical reversion point that can send shares even higher in February 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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Icape Holding and Trigano SA

The main advantage of trading using opposite Icape Holding and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icape Holding 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 Icape Holding 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.