Correlation Between Les Hotels and Credit Agricole
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Credit Agricole 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 Les Hotels and Credit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Hotels Bav and Credit Agricole SA, you can compare the effects of market volatilities on Les Hotels and Credit Agricole 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 Les Hotels with a short position of Credit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Credit Agricole.
Diversification Opportunities for Les Hotels and Credit Agricole
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Les and Credit is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Credit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole SA and Les Hotels 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 Les Hotels Bav are associated (or correlated) with Credit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Agricole SA has no effect on the direction of Les Hotels i.e., Les Hotels and Credit Agricole go up and down completely randomly.
Pair Corralation between Les Hotels and Credit Agricole
Assuming the 90 days trading horizon Les Hotels Bav is expected to generate 1.41 times more return on investment than Credit Agricole. However, Les Hotels is 1.41 times more volatile than Credit Agricole SA. It trades about 0.07 of its potential returns per unit of risk. Credit Agricole SA is currently generating about 0.06 per unit of risk. If you would invest 5,477 in Les Hotels Bav on August 26, 2024 and sell it today you would earn a total of 1,623 from holding Les Hotels Bav or generate 29.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Les Hotels Bav vs. Credit Agricole SA
Performance |
| Timeline |
| Les Hotels Bav |
| Credit Agricole SA |
Les Hotels and Credit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Credit Agricole
The main advantage of trading using opposite Les Hotels and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Credit Agricole 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 Credit Agricole will offset losses from the drop in Credit Agricole's long position.| Les Hotels vs. Les Htels de | Les Hotels vs. Moulinvest | Les Hotels vs. Bernard Loisea | Les Hotels vs. Groupimo SA |
| Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. AXA SA | Credit Agricole vs. Orange 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 Stocks Directory module to find actively traded stocks across global markets.
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