Correlation Between Crdit Agricole and Home Bancorp

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

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

Diversification Opportunities for Crdit Agricole and Home Bancorp

0.37

Correlation Coefficient

Crdit Agricole  Home Bancorp

Weak diversification

The 3 months correlation between Crdit and Home is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and Crdit 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 Crdit Agricole SA are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Crdit Agricole i.e., Crdit Agricole and Home Bancorp go up and down completely randomly.

Pair Corralation between Crdit Agricole and Home Bancorp

Assuming the 90 days horizon Crdit Agricole is expected to generate 5.59 times less return on investment than Home Bancorp. In addition to that, Crdit Agricole is 1.64 times more volatile than Home Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Home Bancorp is currently generating about 0.03 per unit of volatility. If you would invest  4,978  in Home Bancorp on May 4, 2025 and sell it today you would earn a total of  115.00  from holding Home Bancorp or generate 2.31% return on investment over 90 days.

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

Crdit Agricole SA  vs.  Home Bancorp

Crdit Agricole SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crdit Agricole SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Crdit Agricole is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Home Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Home Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Home Bancorp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Crdit Agricole and Home Bancorp

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

The idea behind Crdit Agricole SA and Home Bancorp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.