Correlation Between Credit Agricole and Mastrad
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Mastrad 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 Mastrad 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 Mastrad, you can compare the effects of market volatilities on Credit Agricole and Mastrad 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 Mastrad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Mastrad.
Diversification Opportunities for Credit Agricole and Mastrad
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and Mastrad is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Mastrad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastrad 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 Mastrad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastrad has no effect on the direction of Credit Agricole i.e., Credit Agricole and Mastrad go up and down completely randomly.
Pair Corralation between Credit Agricole and Mastrad
Assuming the 90 days trading horizon Credit Agricole SA is expected to generate 0.16 times more return on investment than Mastrad. However, Credit Agricole SA is 6.2 times less risky than Mastrad. It trades about 0.08 of its potential returns per unit of risk. Mastrad is currently generating about -0.03 per unit of risk. If you would invest 815.00 in Credit Agricole SA on August 31, 2024 and sell it today you would earn a total of 443.00 from holding Credit Agricole SA or generate 54.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole SA vs. Mastrad
Performance |
| Timeline |
| Credit Agricole SA |
| Mastrad |
Credit Agricole and Mastrad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Mastrad
The main advantage of trading using opposite Credit Agricole and Mastrad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Mastrad 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 Mastrad will offset losses from the drop in Mastrad'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 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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