Correlation Between Intesa Sanpaolo and BNP PARIBAS
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and BNP PARIBAS 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 BNP PARIBAS 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 BNP PARIBAS ADR, you can compare the effects of market volatilities on Intesa Sanpaolo and BNP PARIBAS 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 BNP PARIBAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and BNP PARIBAS.
Diversification Opportunities for Intesa Sanpaolo and BNP PARIBAS
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intesa and BNP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and BNP PARIBAS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP PARIBAS ADR 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 BNP PARIBAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP PARIBAS ADR has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and BNP PARIBAS go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and BNP PARIBAS
Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 0.96 times more return on investment than BNP PARIBAS. However, Intesa Sanpaolo SpA is 1.04 times less risky than BNP PARIBAS. It trades about -0.11 of its potential returns per unit of risk. BNP PARIBAS ADR is currently generating about -0.39 per unit of risk. If you would invest 376.00 in Intesa Sanpaolo SpA on August 31, 2024 and sell it today you would lose (17.00) from holding Intesa Sanpaolo SpA or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intesa Sanpaolo SpA vs. BNP PARIBAS ADR
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| BNP PARIBAS ADR |
Intesa Sanpaolo and BNP PARIBAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and BNP PARIBAS
The main advantage of trading using opposite Intesa Sanpaolo and BNP PARIBAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, BNP PARIBAS 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 BNP PARIBAS will offset losses from the drop in BNP PARIBAS's long position.| Intesa Sanpaolo vs. Hollywood Bowl Group | Intesa Sanpaolo vs. Playa Hotels Resorts | Intesa Sanpaolo vs. Singapore Airlines Limited | Intesa Sanpaolo vs. United Utilities Group |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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