Correlation Between Neinor Homes and Crdit Agricole
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and Crdit Agricole 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 Neinor Homes and Crdit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Crdit Agricole SA, you can compare the effects of market volatilities on Neinor Homes and Crdit Agricole 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 Neinor Homes with a short position of Crdit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Crdit Agricole.
Diversification Opportunities for Neinor Homes and Crdit Agricole
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neinor and Crdit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole SA and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with Crdit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of Neinor Homes i.e., Neinor Homes and Crdit Agricole go up and down completely randomly.
Pair Corralation between Neinor Homes and Crdit Agricole
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 1.31 times more return on investment than Crdit Agricole. However, Neinor Homes is 1.31 times more volatile than Crdit Agricole SA. It trades about 0.09 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.07 per unit of risk. If you would invest 679.00 in Neinor Homes SA on September 13, 2024 and sell it today you would earn a total of 811.00 from holding Neinor Homes SA or generate 119.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. Crdit Agricole SA
Performance |
| Timeline |
| Neinor Homes SA |
| Crdit Agricole SA |
Neinor Homes and Crdit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Crdit Agricole
The main advantage of trading using opposite Neinor Homes and Crdit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, Crdit Agricole 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 Crdit Agricole will offset losses from the drop in Crdit Agricole's long position.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| Crdit Agricole vs. EAGLE MATERIALS | Crdit Agricole vs. Corporate Office Properties | Crdit Agricole vs. Taylor Morrison Home | Crdit Agricole vs. Neinor Homes SA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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