Correlation Between CREDIT AGRICOLE and INDIKA ENERGY

Can any of the company-specific risk be diversified away by investing in both CREDIT AGRICOLE and INDIKA ENERGY 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 INDIKA ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CREDIT AGRICOLE and INDIKA ENERGY, you can compare the effects of market volatilities on CREDIT AGRICOLE and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT AGRICOLE and INDIKA ENERGY.

Diversification Opportunities for CREDIT AGRICOLE and INDIKA ENERGY

0.63

Correlation Coefficient

CREDIT AGRICOLE  INDIKA ENERGY

Poor diversification

The 3 months correlation between CREDIT and INDIKA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of CREDIT AGRICOLE i.e., CREDIT AGRICOLE and INDIKA ENERGY go up and down completely randomly.

Pair Corralation between CREDIT AGRICOLE and INDIKA ENERGY

Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to generate 42.78 times less return on investment than INDIKA ENERGY. But when comparing it to its historical volatility, CREDIT AGRICOLE is 2.63 times less risky than INDIKA ENERGY. It trades about 0.0 of its potential returns per unit of risk. INDIKA ENERGY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6.30  in INDIKA ENERGY on September 29, 2024 and sell it today you would earn a total of  1.20  from holding INDIKA ENERGY or generate 19.05% return on investment over 90 days.

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

CREDIT AGRICOLE  vs.  INDIKA ENERGY

CREDIT AGRICOLE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREDIT AGRICOLE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CREDIT AGRICOLE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

INDIKA ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDIKA ENERGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CREDIT AGRICOLE and INDIKA ENERGY

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

The idea behind CREDIT AGRICOLE and INDIKA ENERGY 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 Commodity Directory module to find actively traded commodities issued by global exchanges.