Correlation Between UniCredit SpA and Western Alliance
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Western Alliance 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 Western Alliance 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 Western Alliance Bancorporation, you can compare the effects of market volatilities on UniCredit SpA and Western Alliance 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 Western Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Western Alliance.
Diversification Opportunities for UniCredit SpA and Western Alliance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UniCredit and Western is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA ADR and Western Alliance Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alliance Ban 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 Western Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alliance Ban has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Western Alliance go up and down completely randomly.
Pair Corralation between UniCredit SpA and Western Alliance
Assuming the 90 days horizon UniCredit SpA ADR is expected to generate 0.42 times more return on investment than Western Alliance. However, UniCredit SpA ADR is 2.41 times less risky than Western Alliance. It trades about 0.13 of its potential returns per unit of risk. Western Alliance Bancorporation is currently generating about 0.05 per unit of risk. If you would invest 575.00 in UniCredit SpA ADR on August 26, 2024 and sell it today you would earn a total of 1,523 from holding UniCredit SpA ADR or generate 264.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA ADR vs. Western Alliance Bancorp.
Performance |
| Timeline |
| UniCredit SpA ADR |
| Western Alliance Ban |
UniCredit SpA and Western Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Western Alliance
The main advantage of trading using opposite UniCredit SpA and Western Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Western Alliance 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 Western Alliance will offset losses from the drop in Western Alliance'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 |
| Western Alliance vs. Zions Bancorporation | Western Alliance vs. KeyCorp | Western Alliance vs. First Horizon National | Western Alliance vs. Comerica |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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