Correlation Between Advanced Drainage and Credit Agricole

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

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

Diversification Opportunities for Advanced Drainage and Credit Agricole

0.14

Correlation Coefficient

Advanced Drainage  Credit Agricole

Average diversification

The 3 months correlation between Advanced and Credit is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Drainage Systems 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 Advanced Drainage 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 Advanced Drainage Systems 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 Advanced Drainage i.e., Advanced Drainage and Credit Agricole go up and down completely randomly.

Pair Corralation between Advanced Drainage and Credit Agricole

Considering the 90-day investment horizon Advanced Drainage Systems is expected to under-perform the Credit Agricole. In addition to that, Advanced Drainage is 1.28 times more volatile than Credit Agricole SA. It trades about -0.04 of its total potential returns per unit of risk. Credit Agricole SA is currently generating about 0.0 per unit of volatility. If you would invest  936.00  in Credit Agricole SA on May 2, 2025 and sell it today you would lose (1.00) from holding Credit Agricole SA or give up 0.11% of portfolio value over 90 days.

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

Advanced Drainage Systems  vs.  Credit Agricole SA

Advanced Drainage Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Drainage Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Advanced Drainage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Credit Agricole SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Agricole SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Credit Agricole may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Advanced Drainage and Credit Agricole

The main advantage of trading using opposite Advanced Drainage and Credit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Drainage 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 Advanced Drainage Systems 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.