Correlation Between Crdit Agricole and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both Crdit Agricole and UniCredit SpA 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 Crdit Agricole and UniCredit SpA 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 UniCredit SpA, you can compare the effects of market volatilities on Crdit Agricole and UniCredit SpA 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 Crdit Agricole with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crdit Agricole and UniCredit SpA.
Diversification Opportunities for Crdit Agricole and UniCredit SpA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crdit and UniCredit is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Crdit 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of Crdit Agricole i.e., Crdit Agricole and UniCredit SpA go up and down completely randomly.
Pair Corralation between Crdit Agricole and UniCredit SpA
Assuming the 90 days horizon Crdit Agricole is expected to generate 8.02 times less return on investment than UniCredit SpA. In addition to that, Crdit Agricole is 1.01 times more volatile than UniCredit SpA. It trades about 0.02 of its total potential returns per unit of risk. UniCredit SpA is currently generating about 0.13 per unit of volatility. If you would invest 3,607 in UniCredit SpA on September 27, 2024 and sell it today you would earn a total of 167.00 from holding UniCredit SpA or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crdit Agricole SA vs. UniCredit SpA
Performance |
| Timeline |
| Crdit Agricole SA |
| UniCredit SpA |
Crdit Agricole and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crdit Agricole and UniCredit SpA
The main advantage of trading using opposite Crdit Agricole and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crdit Agricole position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.| Crdit Agricole vs. BNP Paribas SA | Crdit Agricole vs. BNP PARIBAS ADR | Crdit Agricole vs. Intesa Sanpaolo SpA | Crdit Agricole vs. Lloyds Banking Group |
| UniCredit SpA vs. LG Display Co | UniCredit SpA vs. Compugroup Medical SE | UniCredit SpA vs. PROSIEBENSAT1 MEDIADR4 | UniCredit SpA vs. PLAYSTUDIOS A DL 0001 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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