Correlation Between UniCredit SpA and Intesa Sanpaolo
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Intesa Sanpaolo 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 UniCredit SpA and Intesa Sanpaolo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Intesa Sanpaolo SpA, you can compare the effects of market volatilities on UniCredit SpA and Intesa Sanpaolo 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 UniCredit SpA with a short position of Intesa Sanpaolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Intesa Sanpaolo.
Diversification Opportunities for UniCredit SpA and Intesa Sanpaolo
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UniCredit and Intesa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Intesa Sanpaolo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intesa Sanpaolo SpA and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with Intesa Sanpaolo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intesa Sanpaolo SpA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Intesa Sanpaolo go up and down completely randomly.
Pair Corralation between UniCredit SpA and Intesa Sanpaolo
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.21 times more return on investment than Intesa Sanpaolo. However, UniCredit SpA is 1.21 times more volatile than Intesa Sanpaolo SpA. It trades about 0.12 of its potential returns per unit of risk. Intesa Sanpaolo SpA is currently generating about 0.11 per unit of risk. If you would invest 1,708 in UniCredit SpA on August 31, 2024 and sell it today you would earn a total of 1,915 from holding UniCredit SpA or generate 112.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA vs. Intesa Sanpaolo SpA
Performance |
| Timeline |
| UniCredit SpA |
| Intesa Sanpaolo SpA |
UniCredit SpA and Intesa Sanpaolo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Intesa Sanpaolo
The main advantage of trading using opposite UniCredit SpA and Intesa Sanpaolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Intesa Sanpaolo 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 Intesa Sanpaolo will offset losses from the drop in Intesa Sanpaolo's long position.| UniCredit SpA vs. Heartland Financial USA | UniCredit SpA vs. QBE Insurance Group | UniCredit SpA vs. Commonwealth Bank of | UniCredit SpA vs. THORNEY TECHS LTD |
| Intesa Sanpaolo vs. Hollywood Bowl Group | Intesa Sanpaolo vs. Playa Hotels Resorts | Intesa Sanpaolo vs. Singapore Airlines Limited | Intesa Sanpaolo vs. United Utilities Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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