Correlation Between UniCredit SpA and MBank SA
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and MBank SA 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 MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and mBank SA, you can compare the effects of market volatilities on UniCredit SpA and MBank SA 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 MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and MBank SA.
Diversification Opportunities for UniCredit SpA and MBank SA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UniCredit and MBank is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank 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 MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and MBank SA go up and down completely randomly.
Pair Corralation between UniCredit SpA and MBank SA
Assuming the 90 days trading horizon UniCredit SpA is expected to under-perform the MBank SA. In addition to that, UniCredit SpA is 1.09 times more volatile than mBank SA. It trades about -0.21 of its total potential returns per unit of risk. mBank SA is currently generating about -0.09 per unit of volatility. If you would invest 57,680 in mBank SA on August 28, 2024 and sell it today you would lose (2,740) from holding mBank SA or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
UniCredit SpA vs. mBank SA
Performance |
| Timeline |
| UniCredit SpA |
| mBank SA |
UniCredit SpA and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and MBank SA
The main advantage of trading using opposite UniCredit SpA and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, MBank SA 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 MBank SA will offset losses from the drop in MBank SA's long position.| UniCredit SpA vs. SOFTWARE MANSION SPOLKA | UniCredit SpA vs. Skyline Investment SA | UniCredit SpA vs. Quantum Software SA | UniCredit SpA vs. PZ Cormay 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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