Correlation Between Credit Agricole and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Technip Energies 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 Technip Energies 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 Technip Energies BV, you can compare the effects of market volatilities on Credit Agricole and Technip Energies 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 Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Technip Energies.
Diversification Opportunities for Credit Agricole and Technip Energies
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Credit and Technip is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies 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 Technip Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technip Energies has no effect on the direction of Credit Agricole i.e., Credit Agricole and Technip Energies go up and down completely randomly.
Pair Corralation between Credit Agricole and Technip Energies
Assuming the 90 days trading horizon Credit Agricole is expected to generate 1.19 times less return on investment than Technip Energies. But when comparing it to its historical volatility, Credit Agricole SA is 1.68 times less risky than Technip Energies. It trades about 0.5 of its potential returns per unit of risk. Technip Energies BV is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,520 in Technip Energies BV on October 23, 2024 and sell it today you would earn a total of 262.00 from holding Technip Energies BV or generate 10.4% 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. Technip Energies BV
Performance |
| Timeline |
| Credit Agricole SA |
| Technip Energies |
Credit Agricole and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Technip Energies
The main advantage of trading using opposite Credit Agricole and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Technip Energies 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 Technip Energies will offset losses from the drop in Technip Energies' long position.| Credit Agricole vs. Societe Generale SA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Orange SA |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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