Correlation Between Intesa Sanpaolo and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and CaixaBank 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 CaixaBank 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 CaixaBank SA, you can compare the effects of market volatilities on Intesa Sanpaolo and CaixaBank 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 CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and CaixaBank.
Diversification Opportunities for Intesa Sanpaolo and CaixaBank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intesa and CaixaBank is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA 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 CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and CaixaBank go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and CaixaBank
Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 0.73 times more return on investment than CaixaBank. However, Intesa Sanpaolo SpA is 1.36 times less risky than CaixaBank. It trades about 0.27 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.07 per unit of risk. If you would invest 358.00 in Intesa Sanpaolo SpA on September 27, 2024 and sell it today you would earn a total of 24.00 from holding Intesa Sanpaolo SpA or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intesa Sanpaolo SpA vs. CaixaBank SA
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| CaixaBank SA |
Intesa Sanpaolo and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and CaixaBank
The main advantage of trading using opposite Intesa Sanpaolo and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Intesa Sanpaolo vs. BNP Paribas SA | Intesa Sanpaolo vs. BNP PARIBAS ADR | Intesa Sanpaolo vs. Lloyds Banking Group | Intesa Sanpaolo vs. Lloyds Banking Group |
| CaixaBank vs. BNP Paribas SA | CaixaBank vs. BNP PARIBAS ADR | CaixaBank vs. Intesa Sanpaolo SpA | CaixaBank vs. Lloyds Banking 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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