Correlation Between Constellation Software and Crdit Agricole
Can any of the company-specific risk be diversified away by investing in both Constellation Software and Crdit 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 Constellation Software and Crdit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Software and Crdit Agricole SA, you can compare the effects of market volatilities on Constellation Software and Crdit 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 Constellation Software with a short position of Crdit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Software and Crdit Agricole.
Diversification Opportunities for Constellation Software and Crdit Agricole
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Constellation and Crdit is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Software 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 Constellation Software 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 Constellation Software are associated (or correlated) with Crdit 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 Constellation Software i.e., Constellation Software and Crdit Agricole go up and down completely randomly.
Pair Corralation between Constellation Software and Crdit Agricole
Assuming the 90 days trading horizon Constellation Software is expected to generate 0.95 times more return on investment than Crdit Agricole. However, Constellation Software is 1.05 times less risky than Crdit Agricole. It trades about 0.13 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.05 per unit of risk. If you would invest 180,425 in Constellation Software on September 12, 2024 and sell it today you would earn a total of 135,575 from holding Constellation Software or generate 75.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Constellation Software vs. Crdit Agricole SA
Performance |
| Timeline |
| Constellation Software |
| Crdit Agricole SA |
Constellation Software and Crdit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Software and Crdit Agricole
The main advantage of trading using opposite Constellation Software and Crdit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Software position performs unexpectedly, Crdit 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 Crdit Agricole will offset losses from the drop in Crdit Agricole's long position.| Constellation Software vs. Apple Inc | Constellation Software vs. Apple Inc | Constellation Software vs. Apple Inc | Constellation Software vs. Apple Inc |
| Crdit Agricole vs. Constellation Software | Crdit Agricole vs. AXWAY SOFTWARE EO | Crdit Agricole vs. Cars Inc | Crdit Agricole vs. GEELY AUTOMOBILE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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