Correlation Between Sopra Steria and Trigano SA

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

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

Diversification Opportunities for Sopra Steria and Trigano SA

-0.47

Correlation Coefficient

Sopra Steria  Trigano SA

Very good diversification

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

Pair Corralation between Sopra Steria and Trigano SA

Assuming the 90 days trading horizon Sopra Steria Group is expected to under-perform the Trigano SA. In addition to that, Sopra Steria is 1.32 times more volatile than Trigano SA. It trades about -0.08 of its total potential returns per unit of risk. Trigano SA is currently generating about 0.06 per unit of volatility. If you would invest  11,366  in Trigano SA on September 28, 2024 and sell it today you would earn a total of  654.00  from holding Trigano SA or generate 5.75% return on investment over 90 days.

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

Sopra Steria Group  vs.  Trigano SA

Sopra Steria Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sopra Steria Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Trigano SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 5 (%) 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 January 2025.

Pair Trading with Sopra Steria and Trigano SA

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