Correlation Between Veolia Environnement and Trigano SA

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

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

Diversification Opportunities for Veolia Environnement and Trigano SA

0.06

Correlation Coefficient

Veolia Environnement  Trigano SA

Significant diversification

The 3 months correlation between Veolia and Trigano is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and Trigano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigano SA and Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and Trigano SA go up and down completely randomly.

Pair Corralation between Veolia Environnement and Trigano SA

Assuming the 90 days trading horizon Veolia Environnement is expected to generate 24.02 times less return on investment than Trigano SA. But when comparing it to its historical volatility, Veolia Environnement VE is 1.99 times less risky than Trigano SA. It trades about 0.03 of its potential returns per unit of risk. Trigano SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  10,252  in Trigano SA on April 25, 2025 and sell it today you would earn a total of  5,258  from holding Trigano SA or generate 51.29% return on investment over 90 days.

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

Veolia Environnement VE  vs.  Trigano SA

Veolia Environnement

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Veolia Environnement VE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Veolia Environnement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Trigano SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Trigano SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Trigano SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veolia Environnement and Trigano SA

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