Correlation Between UniCredit SpA and Inter Cars
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Inter Cars 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 UniCredit SpA and Inter Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Inter Cars SA, you can compare the effects of market volatilities on UniCredit SpA and Inter Cars 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 UniCredit SpA with a short position of Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Inter Cars.
Diversification Opportunities for UniCredit SpA and Inter Cars
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UniCredit and Inter is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Inter Cars SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Cars SA and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with Inter Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Cars SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Inter Cars go up and down completely randomly.
Pair Corralation between UniCredit SpA and Inter Cars
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 2.35 times more return on investment than Inter Cars. However, UniCredit SpA is 2.35 times more volatile than Inter Cars SA. It trades about 0.07 of its potential returns per unit of risk. Inter Cars SA is currently generating about 0.02 per unit of risk. If you would invest 5,900 in UniCredit SpA on August 30, 2024 and sell it today you would earn a total of 9,642 from holding UniCredit SpA or generate 163.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.87% |
| Values | Daily Returns |
UniCredit SpA vs. Inter Cars SA
Performance |
| Timeline |
| UniCredit SpA |
| Inter Cars SA |
UniCredit SpA and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Inter Cars
The main advantage of trading using opposite UniCredit SpA and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Inter Cars 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 Inter Cars will offset losses from the drop in Inter Cars' long position.| UniCredit SpA vs. Santander Bank Polska | UniCredit SpA vs. Bank Polska Kasa | UniCredit SpA vs. Bank Handlowy w | UniCredit SpA vs. BNP Paribas Bank |
| Inter Cars vs. Banco Santander SA | Inter Cars vs. UniCredit SpA | Inter Cars vs. CEZ as | Inter Cars vs. Polski Koncern Naftowy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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