Correlation Between Intesa Sanpaolo and VP Bank
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and VP Bank 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 Intesa Sanpaolo and VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intesa Sanpaolo SpA and VP Bank AG, you can compare the effects of market volatilities on Intesa Sanpaolo and VP Bank 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 Intesa Sanpaolo with a short position of VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and VP Bank.
Diversification Opportunities for Intesa Sanpaolo and VP Bank
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Intesa and 3VFN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG and Intesa Sanpaolo 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 Intesa Sanpaolo SpA are associated (or correlated) with VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and VP Bank go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and VP Bank
Assuming the 90 days horizon Intesa Sanpaolo is expected to generate 1.92 times less return on investment than VP Bank. But when comparing it to its historical volatility, Intesa Sanpaolo SpA is 1.02 times less risky than VP Bank. It trades about 0.17 of its potential returns per unit of risk. VP Bank AG is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 7,350 in VP Bank AG on September 13, 2024 and sell it today you would earn a total of 800.00 from holding VP Bank AG or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Intesa Sanpaolo SpA vs. VP Bank AG
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| VP Bank AG |
Intesa Sanpaolo and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and VP Bank
The main advantage of trading using opposite Intesa Sanpaolo and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank's long position.| Intesa Sanpaolo vs. Tsingtao Brewery | Intesa Sanpaolo vs. ScanSource | Intesa Sanpaolo vs. Thai Beverage Public | Intesa Sanpaolo vs. Vishay Intertechnology |
| VP Bank vs. Molson Coors Beverage | VP Bank vs. SCANSOURCE | VP Bank vs. Jacquet Metal Service | VP Bank vs. MCEWEN MINING INC |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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