Correlation Between Credit Agricole and Compagnie
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Compagnie 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 Compagnie 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 Compagnie de Chemins, you can compare the effects of market volatilities on Credit Agricole and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Compagnie.
Diversification Opportunities for Credit Agricole and Compagnie
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Credit and Compagnie is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Compagnie de Chemins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Chemins 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Chemins has no effect on the direction of Credit Agricole i.e., Credit Agricole and Compagnie go up and down completely randomly.
Pair Corralation between Credit Agricole and Compagnie
Assuming the 90 days trading horizon Credit Agricole SA is expected to under-perform the Compagnie. But the stock apears to be less risky and, when comparing its historical volatility, Credit Agricole SA is 2.07 times less risky than Compagnie. The stock trades about -0.38 of its potential returns per unit of risk. The Compagnie de Chemins is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 84,000 in Compagnie de Chemins on August 30, 2024 and sell it today you would earn a total of 6,000 from holding Compagnie de Chemins or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Credit Agricole SA vs. Compagnie de Chemins
Performance |
| Timeline |
| Credit Agricole SA |
| Compagnie de Chemins |
Credit Agricole and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Compagnie
The main advantage of trading using opposite Credit Agricole and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| Credit Agricole vs. Societe Generale SA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Carrefour 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings 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 | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |