Correlation Between CREDIT AGRICOLE and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both CREDIT AGRICOLE and Chiba Bank 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 CREDIT AGRICOLE and Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREDIT AGRICOLE and Chiba Bank, you can compare the effects of market volatilities on CREDIT AGRICOLE and Chiba Bank 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 CREDIT AGRICOLE with a short position of Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT AGRICOLE and Chiba Bank.
Diversification Opportunities for CREDIT AGRICOLE and Chiba Bank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREDIT and Chiba is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and Chiba Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank and CREDIT 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 CREDIT AGRICOLE are associated (or correlated) with Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of CREDIT AGRICOLE i.e., CREDIT AGRICOLE and Chiba Bank go up and down completely randomly.
Pair Corralation between CREDIT AGRICOLE and Chiba Bank
Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to under-perform the Chiba Bank. But the stock apears to be less risky and, when comparing its historical volatility, CREDIT AGRICOLE is 1.33 times less risky than Chiba Bank. The stock trades about -0.32 of its potential returns per unit of risk. The Chiba Bank is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Chiba Bank on August 28, 2024 and sell it today you would earn a total of 75.00 from holding Chiba Bank or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREDIT AGRICOLE vs. Chiba Bank
Performance |
| Timeline |
| CREDIT AGRICOLE |
| Chiba Bank |
CREDIT AGRICOLE and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREDIT AGRICOLE and Chiba Bank
The main advantage of trading using opposite CREDIT AGRICOLE and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT AGRICOLE position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| CREDIT AGRICOLE vs. Transport International Holdings | CREDIT AGRICOLE vs. MUTUIONLINE | CREDIT AGRICOLE vs. Gaztransport Technigaz SA | CREDIT AGRICOLE vs. TRAINLINE PLC LS |
| Chiba Bank vs. COMMERCIAL VEHICLE | Chiba Bank vs. CarsalesCom | Chiba Bank vs. Motorcar Parts of | Chiba Bank vs. Daito Trust Construction |
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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