Correlation Between Bilendi and Credit Agricole

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

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

Diversification Opportunities for Bilendi and Credit Agricole

0.68

Correlation Coefficient

Bilendi  Credit Agricole

Poor diversification

The 3 months correlation between Bilendi and Credit is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bilendi 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 Bilendi 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 Bilendi 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 Bilendi i.e., Bilendi and Credit Agricole go up and down completely randomly.

Pair Corralation between Bilendi and Credit Agricole

Assuming the 90 days trading horizon Bilendi is expected to under-perform the Credit Agricole. In addition to that, Bilendi is 2.3 times more volatile than Credit Agricole SA. It trades about -0.13 of its total potential returns per unit of risk. Credit Agricole SA is currently generating about -0.16 per unit of volatility. If you would invest  1,421  in Credit Agricole SA on September 5, 2024 and sell it today you would lose (170.00) from holding Credit Agricole SA or give up 11.96% of portfolio value over 90 days.

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

Bilendi  vs.  Credit Agricole SA

Bilendi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilendi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Credit Agricole SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Agricole SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Bilendi and Credit Agricole

The main advantage of trading using opposite Bilendi and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilendi 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 Bilendi 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.