Correlation Between Fortune Brands and Credit Agricole

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

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

Diversification Opportunities for Fortune Brands and Credit Agricole

0.3

Correlation Coefficient

Fortune Brands  Credit Agricole

Weak diversification

The 3 months correlation between Fortune and Credit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Brands Innovations 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 Fortune Brands 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 Fortune Brands Innovations 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 Fortune Brands i.e., Fortune Brands and Credit Agricole go up and down completely randomly.

Pair Corralation between Fortune Brands and Credit Agricole

Given the investment horizon of 90 days Fortune Brands Innovations is expected to generate 2.21 times more return on investment than Credit Agricole. However, Fortune Brands is 2.21 times more volatile than Credit Agricole SA. It trades about 0.03 of its potential returns per unit of risk. Credit Agricole SA is currently generating about 0.06 per unit of risk. If you would invest  5,405  in Fortune Brands Innovations on May 5, 2025 and sell it today you would earn a total of  178.00  from holding Fortune Brands Innovations or generate 3.29% return on investment over 90 days.

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

Fortune Brands Innovations  vs.  Credit Agricole SA

Fortune Brands Innov

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Brands Innovations are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Fortune Brands is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Credit Agricole SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Agricole SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Credit Agricole is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fortune Brands and Credit Agricole

The main advantage of trading using opposite Fortune Brands and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Brands 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 Fortune Brands Innovations and Credit Agricole SA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.