Correlation Between Compagnie and Trigano SA

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

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

Diversification Opportunities for Compagnie and Trigano SA

0.33

Correlation Coefficient

Compagnie  Trigano SA

Weak diversification

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

Pair Corralation between Compagnie and Trigano SA

Assuming the 90 days trading horizon Compagnie is expected to generate 1.76 times less return on investment than Trigano SA. In addition to that, Compagnie is 1.09 times more volatile than Trigano SA. It trades about 0.09 of its total potential returns per unit of risk. Trigano SA is currently generating about 0.17 per unit of volatility. If you would invest  11,470  in Trigano SA on December 2, 2024 and sell it today you would earn a total of  1,910  from holding Trigano SA or generate 16.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Compagnie Du Mont Blanc  vs.  Trigano SA

Compagnie Du Mont

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Du Mont Blanc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Compagnie may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Trigano SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 13 (%) 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 Compagnie and Trigano SA

The main advantage of trading using opposite Compagnie and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie 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 Compagnie Du Mont Blanc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.