Correlation Between ODIN Investments and Credit Agricole

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

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

Diversification Opportunities for ODIN Investments and Credit Agricole

0.79

Correlation Coefficient

ODIN Investments  Credit Agricole

Poor diversification

The 3 months correlation between ODIN and Credit is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ODIN Investments 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 ODIN Investments 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 ODIN Investments 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 ODIN Investments i.e., ODIN Investments and Credit Agricole go up and down completely randomly.

Pair Corralation between ODIN Investments and Credit Agricole

Assuming the 90 days trading horizon ODIN Investments is expected to generate 1.87 times more return on investment than Credit Agricole. However, ODIN Investments is 1.87 times more volatile than Credit Agricole Egypt. It trades about -0.11 of its potential returns per unit of risk. Credit Agricole Egypt is currently generating about -0.59 per unit of risk. If you would invest  189.00  in ODIN Investments on October 9, 2024 and sell it today you would lose (10.00) from holding ODIN Investments or give up 5.29% of portfolio value over 90 days.

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

ODIN Investments  vs.  Credit Agricole Egypt

ODIN Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ODIN Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ODIN Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Credit Agricole Egypt

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Agricole Egypt are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 ODIN Investments and Credit Agricole

The main advantage of trading using opposite ODIN Investments and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODIN Investments 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 ODIN Investments 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.