Correlation Between Dow Jones and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Crdit Agricole SA, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Crédit Agricole.
Diversification Opportunities for Dow Jones and Crédit Agricole
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Crédit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Crédit Agricole go up and down completely randomly.
Pair Corralation between Dow Jones and Crédit Agricole
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.48 times more return on investment than Crédit Agricole. However, Dow Jones Industrial is 2.07 times less risky than Crédit Agricole. It trades about 0.14 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about -0.04 per unit of risk. If you would invest 3,885,227 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 605,838 from holding Dow Jones Industrial or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Dow Jones Industrial vs. Crdit Agricole SA
Performance |
| Timeline |
Dow Jones and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Crdit Agricole SA
Pair trading matchups for Crédit Agricole
Pair Trading with Dow Jones and Crédit Agricole
The main advantage of trading using opposite Dow Jones and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Crédit Agricole vs. Air New Zealand | Crédit Agricole vs. ITALIAN WINE BRANDS | Crédit Agricole vs. Science Applications International | Crédit Agricole vs. MICRONIC MYDATA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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