Correlation Between Reckitt Benckiser and Credit Agricole
Can any of the company-specific risk be diversified away by investing in both Reckitt Benckiser 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 Reckitt Benckiser and Credit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reckitt Benckiser Group and Credit Agricole SA, you can compare the effects of market volatilities on Reckitt Benckiser 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 Reckitt Benckiser with a short position of Credit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reckitt Benckiser and Credit Agricole.
Diversification Opportunities for Reckitt Benckiser and Credit Agricole
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reckitt and Credit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group 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 Reckitt Benckiser 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 Reckitt Benckiser Group 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 Reckitt Benckiser i.e., Reckitt Benckiser and Credit Agricole go up and down completely randomly.
Pair Corralation between Reckitt Benckiser and Credit Agricole
Assuming the 90 days horizon Reckitt Benckiser Group is expected to under-perform the Credit Agricole. In addition to that, Reckitt Benckiser is 3.89 times more volatile than Credit Agricole SA. It trades about -0.08 of its total potential returns per unit of risk. Credit Agricole SA is currently generating about 0.44 per unit of volatility. If you would invest 673.00 in Credit Agricole SA on February 19, 2024 and sell it today you would earn a total of 188.00 from holding Credit Agricole SA or generate 27.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Reckitt Benckiser Group vs. Credit Agricole SA
Performance |
Timeline |
Reckitt Benckiser |
Credit Agricole SA |
Reckitt Benckiser and Credit Agricole Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Reckitt Benckiser and Credit Agricole
The main advantage of trading using opposite Reckitt Benckiser and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser 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.Reckitt Benckiser vs. Global Clean Energy | Reckitt Benckiser vs. Calissio Resources Group | Reckitt Benckiser vs. Rackla Metals | Reckitt Benckiser vs. Bourque Indts |
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Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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