Correlation Between KBC Group and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both KBC Group 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 KBC Group and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Group NV and Crdit Agricole SA, you can compare the effects of market volatilities on KBC Group 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 KBC Group with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Group and Crédit Agricole.
Diversification Opportunities for KBC Group and Crédit Agricole
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBC and Crédit is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding KBC Group NV 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 KBC Group 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 KBC Group NV 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 KBC Group i.e., KBC Group and Crédit Agricole go up and down completely randomly.
Pair Corralation between KBC Group and Crédit Agricole
Assuming the 90 days horizon KBC Group is expected to generate 1.54 times less return on investment than Crédit Agricole. But when comparing it to its historical volatility, KBC Group NV is 1.0 times less risky than Crédit Agricole. It trades about 0.04 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 906.00 in Crdit Agricole SA on October 15, 2024 and sell it today you would earn a total of 445.00 from holding Crdit Agricole SA or generate 49.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Group NV vs. Crdit Agricole SA
Performance |
| Timeline |
| KBC Group NV |
| Crdit Agricole SA |
KBC Group and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Group and Crédit Agricole
The main advantage of trading using opposite KBC Group and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Group 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.| KBC Group vs. URBAN OUTFITTERS | KBC Group vs. Gaztransport Technigaz SA | KBC Group vs. Gold Road Resources | KBC Group vs. Fast Retailing Co |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |