Correlation Between Trigano SA and High Co

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

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

Diversification Opportunities for Trigano SA and High Co

0.5

Correlation Coefficient

Trigano SA  High Co

Very weak diversification

The 3 months correlation between Trigano and High is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Trigano SA and High Co SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Co 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 High Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Co SA has no effect on the direction of Trigano SA i.e., Trigano SA and High Co go up and down completely randomly.

Pair Corralation between Trigano SA and High Co

Assuming the 90 days trading horizon Trigano SA is expected to generate 5.8 times less return on investment than High Co. But when comparing it to its historical volatility, Trigano SA is 1.45 times less risky than High Co. It trades about 0.05 of its potential returns per unit of risk. High Co SA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  235.00  in High Co SA on December 21, 2024 and sell it today you would earn a total of  79.00  from holding High Co SA or generate 33.62% return on investment over 90 days.

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

Trigano SA  vs.  High Co SA

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

High Co SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in High Co SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, High Co sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trigano SA and High Co

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

The idea behind Trigano SA and High Co 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.