Correlation Between Hotelim Socit and Credit Agricole

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

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

Diversification Opportunities for Hotelim Socit and Credit Agricole

0.69

Correlation Coefficient

Hotelim Socit  Credit Agricole

Poor diversification

The 3 months correlation between Hotelim and Credit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hotelim Socit Anonyme 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 Hotelim Socit 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 Hotelim Socit Anonyme 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 Hotelim Socit i.e., Hotelim Socit and Credit Agricole go up and down completely randomly.

Pair Corralation between Hotelim Socit and Credit Agricole

Assuming the 90 days trading horizon Hotelim Socit Anonyme is expected to generate 2.24 times more return on investment than Credit Agricole. However, Hotelim Socit is 2.24 times more volatile than Credit Agricole SA. It trades about 0.29 of its potential returns per unit of risk. Credit Agricole SA is currently generating about 0.39 per unit of risk. If you would invest  3,700  in Hotelim Socit Anonyme on December 30, 2024 and sell it today you would earn a total of  1,800  from holding Hotelim Socit Anonyme or generate 48.65% return on investment over 90 days.

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

Hotelim Socit Anonyme  vs.  Credit Agricole SA

Hotelim Socit Anonyme

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hotelim Socit Anonyme are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Hotelim Socit reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite somewhat weak basic indicators, Credit Agricole sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hotelim Socit and Credit Agricole

The main advantage of trading using opposite Hotelim Socit and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotelim Socit 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 Hotelim Socit Anonyme 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.