Correlation Between Cars and Crdit Agricole
Can any of the company-specific risk be diversified away by investing in both Cars and Crdit 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 Cars and Crdit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Crdit Agricole SA, you can compare the effects of market volatilities on Cars and Crdit 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 Cars with a short position of Crdit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Crdit Agricole.
Diversification Opportunities for Cars and Crdit Agricole
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cars and Crdit is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc 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 Cars 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 Cars Inc are associated (or correlated) with Crdit 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 Cars i.e., Cars and Crdit Agricole go up and down completely randomly.
Pair Corralation between Cars and Crdit Agricole
Assuming the 90 days horizon Cars is expected to generate 1.55 times less return on investment than Crdit Agricole. In addition to that, Cars is 1.58 times more volatile than Crdit Agricole SA. It trades about 0.02 of its total potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.05 per unit of volatility. If you would invest 1,228 in Crdit Agricole SA on November 9, 2024 and sell it today you would earn a total of 236.00 from holding Crdit Agricole SA or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. Crdit Agricole SA
Performance |
| Timeline |
| Cars Inc |
| Crdit Agricole SA |
Cars and Crdit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Crdit Agricole
The main advantage of trading using opposite Cars and Crdit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Crdit 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 Crdit Agricole will offset losses from the drop in Crdit Agricole's long position.| Cars vs. Telecom Argentina SA | Cars vs. Singapore Telecommunications Limited | Cars vs. Ribbon Communications | Cars vs. ecotel communication ag |
| Crdit Agricole vs. NTT DATA | Crdit Agricole vs. Alliance Data Systems | Crdit Agricole vs. Teradata Corp | Crdit Agricole vs. Guangdong Investment Limited |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |