Correlation Between Crédit Agricole and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Crédit Agricole and CaixaBank 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 Crédit Agricole and CaixaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crdit Agricole SA and CaixaBank SA, you can compare the effects of market volatilities on Crédit Agricole and CaixaBank 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 Crédit Agricole with a short position of CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and CaixaBank.
Diversification Opportunities for Crédit Agricole and CaixaBank
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Crédit and CaixaBank is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA and Crédit Agricole 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 Crdit Agricole SA are associated (or correlated) with CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Crédit Agricole i.e., Crédit Agricole and CaixaBank go up and down completely randomly.
Pair Corralation between Crédit Agricole and CaixaBank
Assuming the 90 days horizon Crédit Agricole is expected to generate 1.37 times less return on investment than CaixaBank. But when comparing it to its historical volatility, Crdit Agricole SA is 1.3 times less risky than CaixaBank. It trades about 0.06 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 328.00 in CaixaBank SA on October 15, 2024 and sell it today you would earn a total of 230.00 from holding CaixaBank SA or generate 70.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crdit Agricole SA vs. CaixaBank SA
Performance |
| Timeline |
| Crdit Agricole SA |
| CaixaBank SA |
Crédit Agricole and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crédit Agricole and CaixaBank
The main advantage of trading using opposite Crédit Agricole and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crédit Agricole position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Crédit Agricole vs. Sterling Construction | Crédit Agricole vs. AM EAGLE OUTFITTERS | Crédit Agricole vs. Daito Trust Construction | Crédit Agricole vs. Hanison Construction Holdings |
| CaixaBank vs. AEGEAN AIRLINES | CaixaBank vs. The Hanover Insurance | CaixaBank vs. Cincinnati Financial Corp | CaixaBank vs. Virtu Financial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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