Correlation Between VIVA WINE and CREDIT AGRICOLE
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and CREDIT AGRICOLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and CREDIT AGRICOLE, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of CREDIT AGRICOLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and CREDIT AGRICOLE.
Diversification Opportunities for VIVA WINE and CREDIT AGRICOLE
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VIVA and CREDIT is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE and VIVA WINE 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 VIVA WINE GROUP 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 has no effect on the direction of VIVA WINE i.e., VIVA WINE and CREDIT AGRICOLE go up and down completely randomly.
Pair Corralation between VIVA WINE and CREDIT AGRICOLE
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 1.03 times more return on investment than CREDIT AGRICOLE. However, VIVA WINE is 1.03 times more volatile than CREDIT AGRICOLE. It trades about -0.05 of its potential returns per unit of risk. CREDIT AGRICOLE is currently generating about -0.23 per unit of risk. If you would invest 350.00 in VIVA WINE GROUP on August 25, 2024 and sell it today you would lose (7.00) from holding VIVA WINE GROUP or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. CREDIT AGRICOLE
Performance |
| Timeline |
| VIVA WINE GROUP |
| CREDIT AGRICOLE |
VIVA WINE and CREDIT AGRICOLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and CREDIT AGRICOLE
The main advantage of trading using opposite VIVA WINE and CREDIT AGRICOLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.The idea behind VIVA WINE GROUP and CREDIT AGRICOLE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CREDIT AGRICOLE vs. Perseus Mining Limited | CREDIT AGRICOLE vs. SERI INDUSTRIAL EO | CREDIT AGRICOLE vs. GREENX METALS LTD | CREDIT AGRICOLE vs. XLMedia PLC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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