Correlation Between International Agricultural and Credit Agricole

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

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

Diversification Opportunities for International Agricultural and Credit Agricole

-0.25

Correlation Coefficient

International Agricultural  Credit Agricole

Very good diversification

The 3 months correlation between International and Credit is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding International Agricultural Pro 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 International Agricultural 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 International Agricultural Products 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 International Agricultural i.e., International Agricultural and Credit Agricole go up and down completely randomly.

Pair Corralation between International Agricultural and Credit Agricole

Assuming the 90 days trading horizon International Agricultural Products is expected to generate 2.37 times more return on investment than Credit Agricole. However, International Agricultural is 2.37 times more volatile than Credit Agricole Egypt. It trades about 0.25 of its potential returns per unit of risk. Credit Agricole Egypt is currently generating about -0.25 per unit of risk. If you would invest  1,884  in International Agricultural Products on October 23, 2024 and sell it today you would earn a total of  180.00  from holding International Agricultural Products or generate 9.55% return on investment over 90 days.

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

International Agricultural Pro  vs.  Credit Agricole Egypt

International Agricultural

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Agricultural Products are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, International Agricultural 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 nearly stable technical and fundamental indicators, Credit Agricole is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with International Agricultural and Credit Agricole

The main advantage of trading using opposite International Agricultural and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Agricultural 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 International Agricultural Products 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.