Correlation Between DATANG INTL and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and Crédit 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 DATANG INTL and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATANG INTL POW and Crdit Agricole SA, you can compare the effects of market volatilities on DATANG INTL and Crédit 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 DATANG INTL with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and Crédit Agricole.
Diversification Opportunities for DATANG INTL and Crédit Agricole
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DATANG and Crédit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole SA and DATANG INTL 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 DATANG INTL POW are associated (or correlated) with Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of DATANG INTL i.e., DATANG INTL and Crédit Agricole go up and down completely randomly.
Pair Corralation between DATANG INTL and Crédit Agricole
Assuming the 90 days trading horizon DATANG INTL POW is expected to under-perform the Crédit Agricole. In addition to that, DATANG INTL is 2.61 times more volatile than Crdit Agricole SA. It trades about -0.09 of its total potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.4 per unit of volatility. If you would invest 1,298 in Crdit Agricole SA on October 23, 2024 and sell it today you would earn a total of 115.00 from holding Crdit Agricole SA or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. Crdit Agricole SA
Performance |
| Timeline |
| DATANG INTL POW |
| Crdit Agricole SA |
DATANG INTL and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and Crédit Agricole
The main advantage of trading using opposite DATANG INTL and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, Crédit 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 Crédit Agricole will offset losses from the drop in Crédit Agricole's long position.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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