Correlation Between Territorial Bancorp and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp and Crédit 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 Territorial Bancorp and Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and Crdit Agricole SA, you can compare the effects of market volatilities on Territorial Bancorp and Crédit 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 Territorial Bancorp with a short position of Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and Crédit Agricole.
Diversification Opportunities for Territorial Bancorp and Crédit Agricole
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Territorial and Crédit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole SA and Territorial Bancorp 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 Territorial Bancorp are associated (or correlated) with Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of Territorial Bancorp i.e., Territorial Bancorp and Crédit Agricole go up and down completely randomly.
Pair Corralation between Territorial Bancorp and Crédit Agricole
Given the investment horizon of 90 days Territorial Bancorp is expected to under-perform the Crédit Agricole. But the stock apears to be less risky and, when comparing its historical volatility, Territorial Bancorp is 2.23 times less risky than Crédit Agricole. The stock trades about -0.21 of its potential returns per unit of risk. The Crdit Agricole SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Crdit Agricole SA on September 10, 2024 and sell it today you would lose (33.00) from holding Crdit Agricole SA or give up 2.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Territorial Bancorp vs. Crdit Agricole SA
Performance |
Timeline |
Territorial Bancorp |
Crdit Agricole SA |
Territorial Bancorp and Crédit Agricole Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Territorial Bancorp and Crédit Agricole
The main advantage of trading using opposite Territorial Bancorp and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp position performs unexpectedly, Crédit 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 Crédit Agricole will offset losses from the drop in Crédit Agricole's long position.Territorial Bancorp vs. First Hawaiian | Territorial Bancorp vs. Bank of Hawaii | Territorial Bancorp vs. Financial Institutions | Territorial Bancorp vs. Heritage Financial |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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