Correlation Between Intesa Sanpaolo and Banco Do
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and Banco Do 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 Banco Do 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 Banco Do Brasil, you can compare the effects of market volatilities on Intesa Sanpaolo and Banco Do 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 Banco Do. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and Banco Do.
Diversification Opportunities for Intesa Sanpaolo and Banco Do
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intesa and Banco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and Banco Do Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Do Brasil 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 Banco Do. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Do Brasil has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and Banco Do go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and Banco Do
Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 0.81 times more return on investment than Banco Do. However, Intesa Sanpaolo SpA is 1.23 times less risky than Banco Do. It trades about 0.08 of its potential returns per unit of risk. Banco Do Brasil is currently generating about 0.04 per unit of risk. If you would invest 1,376 in Intesa Sanpaolo SpA on August 27, 2024 and sell it today you would earn a total of 981.00 from holding Intesa Sanpaolo SpA or generate 71.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intesa Sanpaolo SpA vs. Banco Do Brasil
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| Banco Do Brasil |
Intesa Sanpaolo and Banco Do Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and Banco Do
The main advantage of trading using opposite Intesa Sanpaolo and Banco Do positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, Banco Do 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 Banco Do will offset losses from the drop in Banco Do's long position.| Intesa Sanpaolo vs. Banco Do Brasil | Intesa Sanpaolo vs. KBC Groep NV | Intesa Sanpaolo vs. Fentura Financial | Intesa Sanpaolo vs. Credit Agricole SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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