Correlation Between CREDIT AGRICOLE and Regions Financial

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

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

Diversification Opportunities for CREDIT AGRICOLE and Regions Financial

-0.82

Correlation Coefficient

CREDIT AGRICOLE  Regions Financial

Pay attention - limited upside

The 3 months correlation between CREDIT and Regions is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of CREDIT AGRICOLE i.e., CREDIT AGRICOLE and Regions Financial go up and down completely randomly.

Pair Corralation between CREDIT AGRICOLE and Regions Financial

Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to generate 0.64 times more return on investment than Regions Financial. However, CREDIT AGRICOLE is 1.56 times less risky than Regions Financial. It trades about 0.07 of its potential returns per unit of risk. Regions Financial is currently generating about 0.03 per unit of risk. If you would invest  892.00  in CREDIT AGRICOLE on October 2, 2024 and sell it today you would earn a total of  441.00  from holding CREDIT AGRICOLE or generate 49.44% return on investment over 90 days.

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

CREDIT AGRICOLE  vs.  Regions Financial

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Regions Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Regions Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREDIT AGRICOLE and Regions Financial

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

The idea behind CREDIT AGRICOLE and Regions Financial 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.