Correlation Between Bank of Hawaii and Credit Agricole

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

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

Diversification Opportunities for Bank of Hawaii and Credit Agricole

-0.19

Correlation Coefficient

Bank of Hawaii  Credit Agricole

Good diversification

The 3 months correlation between Bank and Credit is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and Credit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole SA and Bank of Hawaii 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 Bank of Hawaii are associated (or correlated) with Credit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Agricole SA has no effect on the direction of Bank of Hawaii i.e., Bank of Hawaii and Credit Agricole go up and down completely randomly.

Pair Corralation between Bank of Hawaii and Credit Agricole

Considering the 90-day investment horizon Bank of Hawaii is expected to generate 40.31 times less return on investment than Credit Agricole. In addition to that, Bank of Hawaii is 1.18 times more volatile than Credit Agricole SA. It trades about 0.01 of its total potential returns per unit of risk. Credit Agricole SA is currently generating about 0.38 per unit of volatility. If you would invest  685.00  in Credit Agricole SA on December 27, 2024 and sell it today you would earn a total of  230.00  from holding Credit Agricole SA or generate 33.58% return on investment over 90 days.

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

Bank of Hawaii  vs.  Credit Agricole SA

Bank of Hawaii

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of Hawaii has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Bank of Hawaii is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Credit Agricole SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Agricole SA are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Credit Agricole showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank of Hawaii and Credit Agricole

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

The idea behind Bank of Hawaii and Credit Agricole 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.