Correlation Between TFS FINANCIAL and CREDIT AGRICOLE

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

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

Diversification Opportunities for TFS FINANCIAL and CREDIT AGRICOLE

-0.8

Correlation Coefficient

TFS FINANCIAL  CREDIT AGRICOLE

Pay attention - limited upside

The 3 months correlation between TFS and CREDIT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE and TFS FINANCIAL 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 TFS FINANCIAL 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 has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and CREDIT AGRICOLE go up and down completely randomly.

Pair Corralation between TFS FINANCIAL and CREDIT AGRICOLE

Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 3.13 times less return on investment than CREDIT AGRICOLE. In addition to that, TFS FINANCIAL is 1.22 times more volatile than CREDIT AGRICOLE. It trades about 0.02 of its total potential returns per unit of risk. CREDIT AGRICOLE is currently generating about 0.07 per unit of volatility. If you would invest  829.00  in CREDIT AGRICOLE on September 23, 2024 and sell it today you would earn a total of  471.00  from holding CREDIT AGRICOLE or generate 56.82% return on investment over 90 days.

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

TFS FINANCIAL  vs.  CREDIT AGRICOLE

TFS FINANCIAL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TFS FINANCIAL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, TFS FINANCIAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with TFS FINANCIAL and CREDIT AGRICOLE

The main advantage of trading using opposite TFS FINANCIAL and CREDIT AGRICOLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL 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 TFS FINANCIAL and CREDIT AGRICOLE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.