Correlation Between Farmers and Credit Agricole
Can any of the company-specific risk be diversified away by investing in both Farmers and Credit 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 Farmers and Credit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers And Merchants and Credit Agricole SA, you can compare the effects of market volatilities on Farmers and Credit 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 Farmers with a short position of Credit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers and Credit Agricole.
Diversification Opportunities for Farmers and Credit Agricole
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Farmers and Credit is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Farmers And Merchants and Credit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole SA and Farmers 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 Farmers And Merchants are associated (or correlated) with Credit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Agricole SA has no effect on the direction of Farmers i.e., Farmers and Credit Agricole go up and down completely randomly.
Pair Corralation between Farmers and Credit Agricole
Given the investment horizon of 90 days Farmers And Merchants is expected to generate 0.48 times more return on investment than Credit Agricole. However, Farmers And Merchants is 2.08 times less risky than Credit Agricole. It trades about 0.23 of its potential returns per unit of risk. Credit Agricole SA is currently generating about -0.11 per unit of risk. If you would invest 505,181 in Farmers And Merchants on August 24, 2024 and sell it today you would earn a total of 47,819 from holding Farmers And Merchants or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Farmers And Merchants vs. Credit Agricole SA
Performance |
| Timeline |
| Farmers And Merchants |
| Credit Agricole SA |
Farmers and Credit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers and Credit Agricole
The main advantage of trading using opposite Farmers and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers position performs unexpectedly, Credit 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 Credit Agricole will offset losses from the drop in Credit Agricole's long position.| Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
| Credit Agricole vs. Intesa Sanpaolo SpA | Credit Agricole vs. BNP Paribas SA | Credit Agricole vs. Societe Generale ADR | Credit Agricole vs. Hang Seng Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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