Correlation Between Credit Agricole and Universal For

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

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

Diversification Opportunities for Credit Agricole and Universal For

0.56

Correlation Coefficient

Credit Agricole  Universal For

Very weak diversification

The 3 months correlation between Credit and Universal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Credit Agricole Egypt and Universal For Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal For Paper 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 Egypt are associated (or correlated) with Universal For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal For Paper has no effect on the direction of Credit Agricole i.e., Credit Agricole and Universal For go up and down completely randomly.

Pair Corralation between Credit Agricole and Universal For

Assuming the 90 days trading horizon Credit Agricole Egypt is expected to generate 1.05 times more return on investment than Universal For. However, Credit Agricole is 1.05 times more volatile than Universal For Paper. It trades about 0.07 of its potential returns per unit of risk. Universal For Paper is currently generating about 0.01 per unit of risk. If you would invest  980.00  in Credit Agricole Egypt on September 28, 2024 and sell it today you would earn a total of  976.00  from holding Credit Agricole Egypt or generate 99.59% return on investment over 90 days.

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

Credit Agricole Egypt  vs.  Universal For Paper

Credit Agricole Egypt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Agricole Egypt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Universal For Paper

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Universal For Paper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Universal For is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Credit Agricole and Universal For

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

The idea behind Credit Agricole Egypt and Universal For Paper 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.