Correlation Between Intesa Sanpaolo and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and Crédit Agricole 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 Crédit Agricole 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 Crdit Agricole SA, you can compare the effects of market volatilities on Intesa Sanpaolo and Crédit Agricole 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 Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and Crédit Agricole.
Diversification Opportunities for Intesa Sanpaolo and Crédit Agricole
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intesa and Crédit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole 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 Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and Crédit Agricole go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and Crédit Agricole
Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 1.07 times more return on investment than Crédit Agricole. However, Intesa Sanpaolo is 1.07 times more volatile than Crdit Agricole SA. It trades about 0.1 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.06 per unit of risk. If you would invest 192.00 in Intesa Sanpaolo SpA on October 15, 2024 and sell it today you would earn a total of 210.00 from holding Intesa Sanpaolo SpA or generate 109.37% 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. Crdit Agricole SA
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| Crdit Agricole SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intesa Sanpaolo and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and Crédit Agricole
The main advantage of trading using opposite Intesa Sanpaolo and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, Crédit Agricole 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 Crédit Agricole will offset losses from the drop in Crédit Agricole's long position.| Intesa Sanpaolo vs. Texas Roadhouse | Intesa Sanpaolo vs. Liberty Broadband | Intesa Sanpaolo vs. PARKEN Sport Entertainment | Intesa Sanpaolo vs. Gaztransport Technigaz SA |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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