Correlation Between Transport International and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Crdit Agricole SA, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Crédit Agricole.
Diversification Opportunities for Transport International and Crédit Agricole
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transport and Crédit is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin 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 Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Crédit Agricole go up and down completely randomly.
Pair Corralation between Transport International and Crédit Agricole
Assuming the 90 days horizon Transport International Holdings is expected to generate 1.38 times more return on investment than Crédit Agricole. However, Transport International is 1.38 times more volatile than Crdit Agricole SA. It trades about 0.03 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about -0.25 per unit of risk. If you would invest 95.00 in Transport International Holdings on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Transport International Holdings or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. Crdit Agricole SA
Performance |
| Timeline |
| Transport International |
| Crdit Agricole SA |
Transport International and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Crédit Agricole
The main advantage of trading using opposite Transport International and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. Martin Marietta Materials | Transport International vs. Applied Materials | Transport International vs. Materialise NV | Transport International vs. THRACE PLASTICS |
| Crédit Agricole vs. SPORTING | Crédit Agricole vs. Playa Hotels Resorts | Crédit Agricole vs. Transport International Holdings | Crédit Agricole vs. PARKEN Sport Entertainment |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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