Correlation Between Global Ship and Intesa Sanpaolo

Can any of the company-specific risk be diversified away by investing in both Global Ship and Intesa Sanpaolo 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 Global Ship and Intesa Sanpaolo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Ship Lease and Intesa Sanpaolo SpA, you can compare the effects of market volatilities on Global Ship and Intesa Sanpaolo 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 Global Ship with a short position of Intesa Sanpaolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Intesa Sanpaolo.

Diversification Opportunities for Global Ship and Intesa Sanpaolo

0.4

Correlation Coefficient

Global Ship  Intesa Sanpaolo

Very weak diversification

The 3 months correlation between Global and Intesa is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Intesa Sanpaolo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intesa Sanpaolo SpA and Global Ship 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 Global Ship Lease are associated (or correlated) with Intesa Sanpaolo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intesa Sanpaolo SpA has no effect on the direction of Global Ship i.e., Global Ship and Intesa Sanpaolo go up and down completely randomly.

Pair Corralation between Global Ship and Intesa Sanpaolo

Assuming the 90 days horizon Global Ship is expected to generate 3.43 times less return on investment than Intesa Sanpaolo. In addition to that, Global Ship is 1.49 times more volatile than Intesa Sanpaolo SpA. It trades about 0.07 of its total potential returns per unit of risk. Intesa Sanpaolo SpA is currently generating about 0.34 per unit of volatility. If you would invest  380.00  in Intesa Sanpaolo SpA on December 20, 2024 and sell it today you would earn a total of  106.00  from holding Intesa Sanpaolo SpA or generate 27.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Global Ship Lease  vs.  Intesa Sanpaolo SpA

Global Ship Lease

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Ship may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Intesa Sanpaolo SpA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intesa Sanpaolo SpA are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Intesa Sanpaolo reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Ship and Intesa Sanpaolo

The main advantage of trading using opposite Global Ship and Intesa Sanpaolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Intesa Sanpaolo 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 Intesa Sanpaolo will offset losses from the drop in Intesa Sanpaolo's long position.

The idea behind Global Ship Lease and Intesa Sanpaolo SpA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.