Correlation Between Intesa Sanpaolo and Mediobanca Banca
Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and Mediobanca Banca 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 Mediobanca Banca 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 Mediobanca Banca di, you can compare the effects of market volatilities on Intesa Sanpaolo and Mediobanca Banca 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 Mediobanca Banca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and Mediobanca Banca.
Diversification Opportunities for Intesa Sanpaolo and Mediobanca Banca
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intesa and Mediobanca is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and Mediobanca Banca di in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediobanca Banca 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 Mediobanca Banca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediobanca Banca has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and Mediobanca Banca go up and down completely randomly.
Pair Corralation between Intesa Sanpaolo and Mediobanca Banca
Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 1.13 times more return on investment than Mediobanca Banca. However, Intesa Sanpaolo is 1.13 times more volatile than Mediobanca Banca di. It trades about 0.55 of its potential returns per unit of risk. Mediobanca Banca di is currently generating about 0.41 per unit of risk. If you would invest 2,699 in Intesa Sanpaolo SpA on December 9, 2024 and sell it today you would earn a total of 503.00 from holding Intesa Sanpaolo SpA or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intesa Sanpaolo SpA vs. Mediobanca Banca di
Performance |
| Timeline |
| Intesa Sanpaolo SpA |
| Mediobanca Banca |
Intesa Sanpaolo and Mediobanca Banca Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intesa Sanpaolo and Mediobanca Banca
The main advantage of trading using opposite Intesa Sanpaolo and Mediobanca Banca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intesa Sanpaolo position performs unexpectedly, Mediobanca Banca 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 Mediobanca Banca will offset losses from the drop in Mediobanca Banca's long position.| Intesa Sanpaolo vs. Banco Do Brasil | ||
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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