Correlation Between Voyageurs and Trigano SA

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

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

Diversification Opportunities for Voyageurs and Trigano SA

-0.33

Correlation Coefficient

Voyageurs  Trigano SA

Very good diversification

The 3 months correlation between Voyageurs and Trigano is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Voyageurs du Monde and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Voyageurs 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 Voyageurs du Monde 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 Voyageurs i.e., Voyageurs and Trigano SA go up and down completely randomly.

Pair Corralation between Voyageurs and Trigano SA

Assuming the 90 days trading horizon Voyageurs du Monde is expected to generate 1.42 times more return on investment than Trigano SA. However, Voyageurs is 1.42 times more volatile than Trigano SA. It trades about 0.21 of its potential returns per unit of risk. Trigano SA is currently generating about 0.03 per unit of risk. If you would invest  12,680  in Voyageurs du Monde on September 25, 2024 and sell it today you would earn a total of  1,340  from holding Voyageurs du Monde or generate 10.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Voyageurs du Monde  vs.  Trigano SA

Voyageurs du Monde

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voyageurs du Monde has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Voyageurs is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Trigano SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 11 (%) 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 Voyageurs and Trigano SA

The main advantage of trading using opposite Voyageurs and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voyageurs 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 Voyageurs du Monde 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.