Correlation Between CMG Cleantech and Trigano SA

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

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

Diversification Opportunities for CMG Cleantech and Trigano SA

-0.47

Correlation Coefficient

CMG Cleantech  Trigano SA

Very good diversification

The 3 months correlation between CMG and Trigano is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and CMG Cleantech 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 CMG Cleantech 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 CMG Cleantech i.e., CMG Cleantech and Trigano SA go up and down completely randomly.

Pair Corralation between CMG Cleantech and Trigano SA

Assuming the 90 days trading horizon CMG Cleantech SA is expected to under-perform the Trigano SA. In addition to that, CMG Cleantech is 1.45 times more volatile than Trigano SA. It trades about -0.11 of its total potential returns per unit of risk. Trigano SA is currently generating about 0.05 per unit of volatility. If you would invest  12,030  in Trigano SA on December 21, 2024 and sell it today you would earn a total of  550.00  from holding Trigano SA or generate 4.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

CMG Cleantech SA  vs.  Trigano SA

CMG Cleantech SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CMG Cleantech SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Trigano SA

Risk-Adjusted Performance

Insignificant

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CMG Cleantech and Trigano SA

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

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.