Correlation Between Societe Generale and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Societe Generale 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 Societe Generale and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe Generale ADR and Crdit Agricole SA, you can compare the effects of market volatilities on Societe Generale 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 Societe Generale with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe Generale and Crédit Agricole.
Diversification Opportunities for Societe Generale and Crédit Agricole
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Societe and Crédit is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Societe Generale ADR 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 Societe Generale 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 Societe Generale ADR 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 Societe Generale i.e., Societe Generale and Crédit Agricole go up and down completely randomly.
Pair Corralation between Societe Generale and Crédit Agricole
Assuming the 90 days horizon Societe Generale is expected to generate 1.71 times less return on investment than Crédit Agricole. But when comparing it to its historical volatility, Societe Generale ADR is 1.17 times less risky than Crédit Agricole. It trades about 0.02 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,086 in Crdit Agricole SA on August 31, 2024 and sell it today you would earn a total of 210.00 from holding Crdit Agricole SA or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.42% |
| Values | Daily Returns |
Societe Generale ADR vs. Crdit Agricole SA
Performance |
| Timeline |
| Societe Generale ADR |
| Crdit Agricole SA |
Societe Generale and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe Generale and Crédit Agricole
The main advantage of trading using opposite Societe Generale and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe Generale 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.| Societe Generale vs. BNP Paribas SA | Societe Generale vs. Credit Agricole SA | Societe Generale vs. Intesa Sanpaolo SpA | Societe Generale vs. Commerzbank AG PK |
| Crédit Agricole vs. BNP Paribas SA | Crédit Agricole vs. Farmers And Merchants | Crédit Agricole vs. The Bancorp | Crédit Agricole vs. Banco Bradesco SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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