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 Du Mont Blanc, 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
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and Compagnie is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Compagnie Du Mont Blanc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Du Mont 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 Du Mont 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 1.2 times less risky than Compagnie. The stock trades about -0.35 of its potential returns per unit of risk. The Compagnie Du Mont Blanc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 14,000 in Compagnie Du Mont Blanc on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Compagnie Du Mont Blanc or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Agricole SA vs. Compagnie Du Mont Blanc
Performance |
| Timeline |
| Credit Agricole SA |
| Compagnie Du Mont |
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. Orange SA |
| Compagnie vs. Bonduelle SCA | Compagnie vs. Imerys SA | Compagnie vs. Manitou BF SA | Compagnie vs. Ossiam Minimum Variance |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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