Correlation Between Credit Agricole and Aures Technologies

Can any of the company-specific risk be diversified away by investing in both Credit Agricole and Aures Technologies 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 Aures Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Credit Agricole SA and Aures Technologies SA, you can compare the effects of market volatilities on Credit Agricole and Aures Technologies 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 Aures Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Agricole and Aures Technologies.

Diversification Opportunities for Credit Agricole and Aures Technologies

-0.32

Correlation Coefficient

Credit Agricole  Aures Technologies

Very good diversification

The 3 months correlation between Credit and Aures is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole SA and Aures Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aures Technologies 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 SA are associated (or correlated) with Aures Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aures Technologies has no effect on the direction of Credit Agricole i.e., Credit Agricole and Aures Technologies go up and down completely randomly.

Pair Corralation between Credit Agricole and Aures Technologies

Assuming the 90 days trading horizon Credit Agricole is expected to generate 2.23 times less return on investment than Aures Technologies. But when comparing it to its historical volatility, Credit Agricole SA is 7.26 times less risky than Aures Technologies. It trades about 0.07 of its potential returns per unit of risk. Aures Technologies SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  896.00  in Aures Technologies SA on October 11, 2024 and sell it today you would lose (271.00) from holding Aures Technologies SA or give up 30.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Credit Agricole SA  vs.  Aures Technologies SA

Credit Agricole SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Agricole SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Credit Agricole is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aures Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Credit Agricole and Aures Technologies

The main advantage of trading using opposite Credit Agricole and Aures Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Agricole position performs unexpectedly, Aures Technologies 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 Aures Technologies will offset losses from the drop in Aures Technologies' long position.

The idea behind Credit Agricole SA and Aures Technologies SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.