Correlation Between UniCredit SpA and KBC Groep
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and KBC Groep 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 KBC Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA ADR and KBC Groep NV, you can compare the effects of market volatilities on UniCredit SpA and KBC Groep 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 KBC Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and KBC Groep.
Diversification Opportunities for UniCredit SpA and KBC Groep
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between UniCredit and KBC is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA ADR and KBC Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Groep NV 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 ADR are associated (or correlated) with KBC Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Groep NV has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and KBC Groep go up and down completely randomly.
Pair Corralation between UniCredit SpA and KBC Groep
Assuming the 90 days horizon UniCredit SpA ADR is expected to generate 1.46 times more return on investment than KBC Groep. However, UniCredit SpA is 1.46 times more volatile than KBC Groep NV. It trades about 0.0 of its potential returns per unit of risk. KBC Groep NV is currently generating about 0.0 per unit of risk. If you would invest 1,927 in UniCredit SpA ADR on August 29, 2024 and sell it today you would lose (41.00) from holding UniCredit SpA ADR or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA ADR vs. KBC Groep NV
Performance |
| Timeline |
| UniCredit SpA ADR |
| KBC Groep NV |
UniCredit SpA and KBC Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and KBC Groep
The main advantage of trading using opposite UniCredit SpA and KBC Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, KBC Groep 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 KBC Groep will offset losses from the drop in KBC Groep's long position.| UniCredit SpA vs. Banco Do Brasil | UniCredit SpA vs. Societe Generale ADR | UniCredit SpA vs. BNP Paribas SA | UniCredit SpA vs. Credit Agricole SA |
| KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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