Correlation Between Crdit Agricole and KBC Group

Can any of the company-specific risk be diversified away by investing in both Crdit Agricole and KBC Group 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 KBC Group 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 KBC Group NV, you can compare the effects of market volatilities on Crdit Agricole and KBC Group 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 KBC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crdit Agricole and KBC Group.

Diversification Opportunities for Crdit Agricole and KBC Group

0.76

Correlation Coefficient

Crdit Agricole  KBC Group

Poor diversification

The 3 months correlation between Crdit and KBC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and KBC Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Group NV 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 KBC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Group NV has no effect on the direction of Crdit Agricole i.e., Crdit Agricole and KBC Group go up and down completely randomly.

Pair Corralation between Crdit Agricole and KBC Group

Assuming the 90 days horizon Crdit Agricole is expected to generate 2.73 times less return on investment than KBC Group. But when comparing it to its historical volatility, Crdit Agricole SA is 1.05 times less risky than KBC Group. It trades about 0.07 of its potential returns per unit of risk. KBC Group NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,542  in KBC Group NV on April 22, 2025 and sell it today you would earn a total of  1,268  from holding KBC Group NV or generate 16.81% return on investment over 90 days.

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

Crdit Agricole SA  vs.  KBC Group NV

Crdit Agricole SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crdit Agricole SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

KBC Group NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Group NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KBC Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crdit Agricole and KBC Group

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

The idea behind Crdit Agricole SA and KBC Group NV 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..