Correlation Between Credit Agricole and Soditech
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Soditech 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 Soditech 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 Soditech SA, you can compare the effects of market volatilities on Credit Agricole and Soditech 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 Soditech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Soditech.
Diversification Opportunities for Credit Agricole and Soditech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Credit and Soditech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech 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 Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Credit Agricole i.e., Credit Agricole and Soditech go up and down completely randomly.
Pair Corralation between Credit Agricole and Soditech
Assuming the 90 days trading horizon Credit Agricole SA is expected to generate 0.15 times more return on investment than Soditech. However, Credit Agricole SA is 6.75 times less risky than Soditech. It trades about 0.54 of its potential returns per unit of risk. Soditech SA is currently generating about -0.12 per unit of risk. If you would invest 1,334 in Credit Agricole SA on November 3, 2024 and sell it today you would earn a total of 121.00 from holding Credit Agricole SA or generate 9.07% 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. Soditech SA
Performance |
| Timeline |
| Credit Agricole SA |
| Soditech SA |
Credit Agricole and Soditech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Soditech
The main advantage of trading using opposite Credit Agricole and Soditech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Soditech 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 Soditech will offset losses from the drop in Soditech'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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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