Correlation Between CREDIT AGRICOLE and TFS FINANCIAL

Can any of the company-specific risk be diversified away by investing in both CREDIT AGRICOLE and TFS 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 TFS 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 TFS FINANCIAL, you can compare the effects of market volatilities on CREDIT AGRICOLE and TFS 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT AGRICOLE and TFS FINANCIAL.

Diversification Opportunities for CREDIT AGRICOLE and TFS FINANCIAL

-0.8

Correlation Coefficient

CREDIT AGRICOLE  TFS FINANCIAL

Pay attention - limited upside

The 3 months correlation between CREDIT and TFS is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of CREDIT AGRICOLE i.e., CREDIT AGRICOLE and TFS FINANCIAL go up and down completely randomly.

Pair Corralation between CREDIT AGRICOLE and TFS FINANCIAL

Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to generate 0.82 times more return on investment than TFS FINANCIAL. However, CREDIT AGRICOLE is 1.22 times less risky than TFS FINANCIAL. It trades about 0.07 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.02 per unit of risk. 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

CREDIT AGRICOLE  vs.  TFS 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.

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.

Pair Trading with CREDIT AGRICOLE and TFS FINANCIAL

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

The idea behind CREDIT AGRICOLE and TFS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.