Correlation Between Credit Agricole and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Credit Agricole 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 Credit Agricole and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Agricole SA and Crdit Agricole SA, you can compare the effects of market volatilities on Credit Agricole 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 Credit Agricole with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Crédit Agricole.
Diversification Opportunities for Credit Agricole and Crédit Agricole
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Credit and Crédit is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA 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 Credit 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 Credit Agricole SA 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 Credit Agricole i.e., Credit Agricole and Crédit Agricole go up and down completely randomly.
Pair Corralation between Credit Agricole and Crédit Agricole
Assuming the 90 days horizon Credit Agricole is expected to generate 1.91 times less return on investment than Crédit Agricole. But when comparing it to its historical volatility, Credit Agricole SA is 2.65 times less risky than Crédit Agricole. It trades about 0.05 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Strong |
| Accuracy | 92.97% |
| Values | Daily Returns |
Credit Agricole SA vs. Crdit Agricole SA
Performance |
| Timeline |
| Credit Agricole SA |
| Crdit Agricole SA |
Credit Agricole and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Agricole and Crédit Agricole
The main advantage of trading using opposite Credit Agricole and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole 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.The idea behind Credit Agricole SA and Crdit Agricole SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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