Correlation Between Crédit Agricole and Swedbank
Can any of the company-specific risk be diversified away by investing in both Crédit Agricole and Swedbank 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 Swedbank 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 Swedbank AB, you can compare the effects of market volatilities on Crédit Agricole and Swedbank 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 Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and Swedbank.
Diversification Opportunities for Crédit Agricole and Swedbank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crédit and Swedbank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Crédit Agricole i.e., Crédit Agricole and Swedbank go up and down completely randomly.
Pair Corralation between Crédit Agricole and Swedbank
Assuming the 90 days horizon Crédit Agricole is expected to generate 1.05 times less return on investment than Swedbank. In addition to that, Crédit Agricole is 1.3 times more volatile than Swedbank AB. It trades about 0.04 of its total potential returns per unit of risk. Swedbank AB is currently generating about 0.05 per unit of volatility. If you would invest 1,539 in Swedbank AB on August 31, 2024 and sell it today you would earn a total of 418.00 from holding Swedbank AB or generate 27.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.42% |
| Values | Daily Returns |
Crdit Agricole SA vs. Swedbank AB
Performance |
| Timeline |
| Crdit Agricole SA |
| Swedbank AB |
Crédit Agricole and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crédit Agricole and Swedbank
The main advantage of trading using opposite Crédit Agricole and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crédit Agricole position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank'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 |
| Swedbank vs. HUMANA INC | Swedbank vs. SCOR PK | Swedbank vs. Aquagold International | Swedbank vs. Thrivent High Yield |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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