Correlation Between Grand Investment and Credit Agricole

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

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

Diversification Opportunities for Grand Investment and Credit Agricole

-0.53

Correlation Coefficient

Grand Investment  Credit Agricole

Excellent diversification

The 3 months correlation between Grand and Credit is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grand Investment Capital and Credit Agricole Egypt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Agricole Egypt and Grand Investment 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 Grand Investment Capital 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 Egypt has no effect on the direction of Grand Investment i.e., Grand Investment and Credit Agricole go up and down completely randomly.

Pair Corralation between Grand Investment and Credit Agricole

Assuming the 90 days trading horizon Grand Investment Capital is expected to generate 1.36 times more return on investment than Credit Agricole. However, Grand Investment is 1.36 times more volatile than Credit Agricole Egypt. It trades about 0.17 of its potential returns per unit of risk. Credit Agricole Egypt is currently generating about -0.13 per unit of risk. If you would invest  925.00  in Grand Investment Capital on October 26, 2024 and sell it today you would earn a total of  183.00  from holding Grand Investment Capital or generate 19.78% return on investment over 90 days.

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

Grand Investment Capital  vs.  Credit Agricole Egypt

Grand Investment Capital

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Investment Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Grand Investment reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Grand Investment and Credit Agricole

The main advantage of trading using opposite Grand Investment and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Investment 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 Grand Investment Capital and Credit Agricole Egypt 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.