Correlation Between CREDIT AGRICOLE and Haier Smart
Can any of the company-specific risk be diversified away by investing in both CREDIT AGRICOLE and Haier Smart 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 CREDIT AGRICOLE and Haier Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREDIT AGRICOLE and Haier Smart Home, you can compare the effects of market volatilities on CREDIT AGRICOLE and Haier Smart 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 CREDIT AGRICOLE with a short position of Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT AGRICOLE and Haier Smart.
Diversification Opportunities for CREDIT AGRICOLE and Haier Smart
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CREDIT and Haier is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and CREDIT AGRICOLE 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 CREDIT AGRICOLE are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of CREDIT AGRICOLE i.e., CREDIT AGRICOLE and Haier Smart go up and down completely randomly.
Pair Corralation between CREDIT AGRICOLE and Haier Smart
Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to generate 0.68 times more return on investment than Haier Smart. However, CREDIT AGRICOLE is 1.46 times less risky than Haier Smart. It trades about -0.02 of its potential returns per unit of risk. Haier Smart Home is currently generating about -0.02 per unit of risk. If you would invest 1,360 in CREDIT AGRICOLE on October 2, 2024 and sell it today you would lose (27.00) from holding CREDIT AGRICOLE or give up 1.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CREDIT AGRICOLE vs. Haier Smart Home
Performance |
Timeline |
CREDIT AGRICOLE |
Haier Smart Home |
CREDIT AGRICOLE and Haier Smart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CREDIT AGRICOLE and Haier Smart
The main advantage of trading using opposite CREDIT AGRICOLE and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT AGRICOLE position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.CREDIT AGRICOLE vs. United Breweries Co | CREDIT AGRICOLE vs. The Boston Beer | CREDIT AGRICOLE vs. UET United Electronic | CREDIT AGRICOLE vs. Molson Coors Beverage |
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Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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