Correlation Between Credit Agricole and Eutelsat Communications
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Eutelsat Communications 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 Eutelsat Communications 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 Eutelsat Communications SA, you can compare the effects of market volatilities on Credit Agricole and Eutelsat Communications 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 Eutelsat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Eutelsat Communications.
Diversification Opportunities for Credit Agricole and Eutelsat Communications
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Credit and Eutelsat is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Eutelsat Communications SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eutelsat Communications 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 Eutelsat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eutelsat Communications has no effect on the direction of Credit Agricole i.e., Credit Agricole and Eutelsat Communications go up and down completely randomly.
Pair Corralation between Credit Agricole and Eutelsat Communications
Assuming the 90 days trading horizon Credit Agricole SA is expected to generate 0.48 times more return on investment than Eutelsat Communications. However, Credit Agricole SA is 2.08 times less risky than Eutelsat Communications. It trades about 0.08 of its potential returns per unit of risk. Eutelsat Communications SA is currently generating about -0.05 per unit of risk. If you would invest 892.00 in Credit Agricole SA on August 24, 2024 and sell it today you would earn a total of 413.00 from holding Credit Agricole SA or generate 46.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole SA vs. Eutelsat Communications SA
Performance |
| Timeline |
| Credit Agricole SA |
| Eutelsat Communications |
Credit Agricole and Eutelsat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Eutelsat Communications
The main advantage of trading using opposite Credit Agricole and Eutelsat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Eutelsat Communications 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 Eutelsat Communications will offset losses from the drop in Eutelsat Communications' long position.| Credit Agricole vs. Societe Generale SA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Orange SA |
| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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