Correlation Between Mediobanca Banca and Ageas SANV

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Can any of the company-specific risk be diversified away by investing in both Mediobanca Banca and Ageas SANV 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 Mediobanca Banca and Ageas SANV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mediobanca Banca di and ageas SANV, you can compare the effects of market volatilities on Mediobanca Banca and Ageas SANV 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 Mediobanca Banca with a short position of Ageas SANV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediobanca Banca and Ageas SANV.

Diversification Opportunities for Mediobanca Banca and Ageas SANV

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Mediobanca and Ageas is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mediobanca Banca di and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ageas SANV and Mediobanca Banca 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 Mediobanca Banca di are associated (or correlated) with Ageas SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ageas SANV has no effect on the direction of Mediobanca Banca i.e., Mediobanca Banca and Ageas SANV go up and down completely randomly.

Pair Corralation between Mediobanca Banca and Ageas SANV

Assuming the 90 days horizon Mediobanca Banca di is expected to generate 1.14 times more return on investment than Ageas SANV. However, Mediobanca Banca is 1.14 times more volatile than ageas SANV. It trades about 0.04 of its potential returns per unit of risk. ageas SANV is currently generating about -0.17 per unit of risk. If you would invest  1,450  in Mediobanca Banca di on September 19, 2024 and sell it today you would earn a total of  14.00  from holding Mediobanca Banca di or generate 0.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Mediobanca Banca di  vs.  ageas SANV

 Performance 
       Timeline  
Mediobanca Banca 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mediobanca Banca di has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
ageas SANV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ageas SANV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mediobanca Banca and Ageas SANV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mediobanca Banca and Ageas SANV

The main advantage of trading using opposite Mediobanca Banca and Ageas SANV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediobanca Banca position performs unexpectedly, Ageas SANV 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 Ageas SANV will offset losses from the drop in Ageas SANV's long position.
The idea behind Mediobanca Banca di and ageas SANV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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