Correlation Between CFM Indosuez and Caisse Rgionale

Can any of the company-specific risk be diversified away by investing in both CFM Indosuez and Caisse Rgionale 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 CFM Indosuez and Caisse Rgionale into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CFM Indosuez Wealth and Caisse Rgionale de, you can compare the effects of market volatilities on CFM Indosuez and Caisse Rgionale 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 CFM Indosuez with a short position of Caisse Rgionale. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFM Indosuez and Caisse Rgionale.

Diversification Opportunities for CFM Indosuez and Caisse Rgionale

0.22

Correlation Coefficient

CFM Indosuez  Caisse Rgionale

Modest diversification

The 3 months correlation between CFM and Caisse is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CFM Indosuez Wealth and Caisse Rgionale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caisse Rgionale de and CFM Indosuez 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 CFM Indosuez Wealth are associated (or correlated) with Caisse Rgionale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caisse Rgionale de has no effect on the direction of CFM Indosuez i.e., CFM Indosuez and Caisse Rgionale go up and down completely randomly.

Pair Corralation between CFM Indosuez and Caisse Rgionale

Assuming the 90 days trading horizon CFM Indosuez is expected to generate 1.22 times less return on investment than Caisse Rgionale. In addition to that, CFM Indosuez is 1.67 times more volatile than Caisse Rgionale de. It trades about 0.06 of its total potential returns per unit of risk. Caisse Rgionale de is currently generating about 0.11 per unit of volatility. If you would invest  6,580  in Caisse Rgionale de on December 29, 2024 and sell it today you would earn a total of  660.00  from holding Caisse Rgionale de or generate 10.03% return on investment over 90 days.

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

CFM Indosuez Wealth  vs.  Caisse Rgionale de

CFM Indosuez Wealth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CFM Indosuez Wealth are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CFM Indosuez may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Caisse Rgionale de

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caisse Rgionale de are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Caisse Rgionale may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CFM Indosuez and Caisse Rgionale

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

The idea behind CFM Indosuez Wealth and Caisse Rgionale de 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.