Correlation Between Bank of Hawaii and Intesa Sanpaolo

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Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii 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 Bank of Hawaii and Intesa Sanpaolo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and Intesa Sanpaolo SpA, you can compare the effects of market volatilities on Bank of Hawaii 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 Bank of Hawaii with a short position of Intesa Sanpaolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and Intesa Sanpaolo.

Diversification Opportunities for Bank of Hawaii and Intesa Sanpaolo

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bank and Intesa is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii 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 Bank of Hawaii 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 Bank of Hawaii 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 Bank of Hawaii i.e., Bank of Hawaii and Intesa Sanpaolo go up and down completely randomly.

Pair Corralation between Bank of Hawaii and Intesa Sanpaolo

Considering the 90-day investment horizon Bank of Hawaii is expected to generate 1.55 times more return on investment than Intesa Sanpaolo. However, Bank of Hawaii is 1.55 times more volatile than Intesa Sanpaolo SpA. It trades about 0.13 of its potential returns per unit of risk. Intesa Sanpaolo SpA is currently generating about 0.03 per unit of risk. If you would invest  6,333  in Bank of Hawaii on September 14, 2024 and sell it today you would earn a total of  1,138  from holding Bank of Hawaii or generate 17.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bank of Hawaii  vs.  Intesa Sanpaolo SpA

 Performance 
       Timeline  
Bank of Hawaii 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Hawaii are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Bank of Hawaii demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Intesa Sanpaolo SpA 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Intesa Sanpaolo SpA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Intesa Sanpaolo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bank of Hawaii and Intesa Sanpaolo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank of Hawaii and Intesa Sanpaolo

The main advantage of trading using opposite Bank of Hawaii and Intesa Sanpaolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii 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 Bank of Hawaii 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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