Correlation Between Crédit Agricole and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Crédit Agricole and Commerzbank 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 Crédit Agricole and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crdit Agricole SA and Commerzbank AG PK, you can compare the effects of market volatilities on Crédit Agricole and Commerzbank 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 Crédit Agricole with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and Commerzbank.
Diversification Opportunities for Crédit Agricole and Commerzbank
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crédit and Commerzbank is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and Commerzbank AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG PK and Crédit 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 Crdit Agricole SA are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG PK has no effect on the direction of Crédit Agricole i.e., Crédit Agricole and Commerzbank go up and down completely randomly.
Pair Corralation between Crédit Agricole and Commerzbank
Assuming the 90 days horizon Crdit Agricole SA is expected to generate 1.62 times more return on investment than Commerzbank. However, Crédit Agricole is 1.62 times more volatile than Commerzbank AG PK. It trades about 0.04 of its potential returns per unit of risk. Commerzbank AG PK is currently generating about 0.05 per unit of risk. If you would invest 1,034 in Crdit Agricole SA on August 27, 2024 and sell it today you would earn a total of 380.00 from holding Crdit Agricole SA or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.97% |
| Values | Daily Returns |
Crdit Agricole SA vs. Commerzbank AG PK
Performance |
| Timeline |
| Crdit Agricole SA |
| Commerzbank AG PK |
Crédit Agricole and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crédit Agricole and Commerzbank
The main advantage of trading using opposite Crédit Agricole and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crédit Agricole position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Crédit Agricole vs. BNP Paribas SA | Crédit Agricole vs. Farmers And Merchants | Crédit Agricole vs. The Bancorp | Crédit Agricole vs. Banco Bradesco 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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