Correlation Between UniCredit SpA and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA 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 UniCredit SpA and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Crdit Agricole SA, you can compare the effects of market volatilities on UniCredit SpA 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 UniCredit SpA with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Crédit Agricole.
Diversification Opportunities for UniCredit SpA and Crédit Agricole
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UniCredit and Crédit is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA 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 UniCredit SpA i.e., UniCredit SpA and Crédit Agricole go up and down completely randomly.
Pair Corralation between UniCredit SpA and Crédit Agricole
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.34 times more return on investment than Crédit Agricole. However, UniCredit SpA is 1.34 times more volatile than Crdit Agricole SA. It trades about 0.12 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.06 per unit of risk. If you would invest 1,325 in UniCredit SpA on October 15, 2024 and sell it today you would earn a total of 2,664 from holding UniCredit SpA or generate 201.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA vs. Crdit Agricole SA
Performance |
| Timeline |
| UniCredit SpA |
| Crdit Agricole SA |
UniCredit SpA and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Crédit Agricole
The main advantage of trading using opposite UniCredit SpA and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA 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.| UniCredit SpA vs. DXC Technology Co | UniCredit SpA vs. Firan Technology Group | UniCredit SpA vs. Corporate Travel Management | UniCredit SpA vs. Kingdee International Software |
| Crédit Agricole vs. Sterling Construction | Crédit Agricole vs. AM EAGLE OUTFITTERS | Crédit Agricole vs. Daito Trust Construction | Crédit Agricole vs. Hanison Construction Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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