Correlation Between Trigano SA and Poujoulat

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

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

Diversification Opportunities for Trigano SA and Poujoulat

-0.35

Correlation Coefficient

Trigano SA  Poujoulat

Very good diversification

The 3 months correlation between Trigano and Poujoulat is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and Poujoulat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poujoulat SA and Trigano SA 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 Trigano SA are associated (or correlated) with Poujoulat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poujoulat SA has no effect on the direction of Trigano SA i.e., Trigano SA and Poujoulat go up and down completely randomly.

Pair Corralation between Trigano SA and Poujoulat

Assuming the 90 days trading horizon Trigano SA is expected to generate 0.99 times more return on investment than Poujoulat. However, Trigano SA is 1.01 times less risky than Poujoulat. It trades about 0.05 of its potential returns per unit of risk. Poujoulat SA is currently generating about -0.05 per unit of risk. If you would invest  11,071  in Trigano SA on September 29, 2024 and sell it today you would earn a total of  1,089  from holding Trigano SA or generate 9.84% return on investment over 90 days.

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

Trigano SA  vs.  Poujoulat SA

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.

Poujoulat SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Trigano SA and Poujoulat

The main advantage of trading using opposite Trigano SA and Poujoulat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trigano SA position performs unexpectedly, Poujoulat 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 Poujoulat will offset losses from the drop in Poujoulat's long position.

The idea behind Trigano SA and Poujoulat 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.