Correlation Between Seche Environnem and Trigano SA

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

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

Diversification Opportunities for Seche Environnem and Trigano SA

0.74

Correlation Coefficient

Seche Environnem  Trigano SA

Poor diversification

The 3 months correlation between Seche and Trigano is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnem and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Seche Environnem 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 Seche Environnem 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 Seche Environnem i.e., Seche Environnem and Trigano SA go up and down completely randomly.

Pair Corralation between Seche Environnem and Trigano SA

Assuming the 90 days trading horizon Seche Environnem is expected to generate 1.2 times more return on investment than Trigano SA. However, Seche Environnem is 1.2 times more volatile than Trigano SA. It trades about 0.0 of its potential returns per unit of risk. Trigano SA is currently generating about -0.09 per unit of risk. If you would invest  7,730  in Seche Environnem on December 29, 2024 and sell it today you would lose (170.00) from holding Seche Environnem or give up 2.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Seche Environnem  vs.  Trigano SA

Seche Environnem

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seche Environnem has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Seche Environnem is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 Seche Environnem and Trigano SA

The main advantage of trading using opposite Seche Environnem and Trigano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnem 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 Seche Environnem 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.