Correlation Between Credit Agricole and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Air Liquide 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 Credit Agricole and Air Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Agricole SA and Air Liquide SA, you can compare the effects of market volatilities on Credit Agricole and Air Liquide 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 Credit Agricole with a short position of Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Air Liquide.
Diversification Opportunities for Credit Agricole and Air Liquide
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Air is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA and Credit Agricole 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 Credit Agricole SA are associated (or correlated) with Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Credit Agricole i.e., Credit Agricole and Air Liquide go up and down completely randomly.
Pair Corralation between Credit Agricole and Air Liquide
Assuming the 90 days trading horizon Credit Agricole SA is expected to generate 0.79 times more return on investment than Air Liquide. However, Credit Agricole SA is 1.26 times less risky than Air Liquide. It trades about 0.61 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.36 per unit of risk. If you would invest 1,336 in Credit Agricole SA on November 5, 2024 and sell it today you would earn a total of 119.00 from holding Credit Agricole SA or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole SA vs. Air Liquide SA
Performance |
| Timeline |
| Credit Agricole SA |
| Air Liquide SA |
Credit Agricole and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Air Liquide
The main advantage of trading using opposite Credit Agricole and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.| Credit Agricole vs. Societe Generale SA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Orange SA |
| Air Liquide vs. Sanofi SA | Air Liquide vs. LOreal SA | Air Liquide vs. Vinci SA | Air Liquide vs. Schneider Electric SE |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |