Correlation Between Fentura Financial and Intesa Sanpaolo

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

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

Diversification Opportunities for Fentura Financial and Intesa Sanpaolo

-0.76

Correlation Coefficient

Fentura Financial  Intesa Sanpaolo

Pay attention - limited upside

The 3 months correlation between Fentura and Intesa is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fentura Financial 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 Fentura Financial 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 Fentura Financial 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 Fentura Financial i.e., Fentura Financial and Intesa Sanpaolo go up and down completely randomly.

Pair Corralation between Fentura Financial and Intesa Sanpaolo

Given the investment horizon of 90 days Fentura Financial is expected to under-perform the Intesa Sanpaolo. But the otc stock apears to be less risky and, when comparing its historical volatility, Fentura Financial is 1.27 times less risky than Intesa Sanpaolo. The otc stock trades about -0.07 of its potential returns per unit of risk. The Intesa Sanpaolo SpA is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  2,419  in Intesa Sanpaolo SpA on December 29, 2024 and sell it today you would earn a total of  709.00  from holding Intesa Sanpaolo SpA or generate 29.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	68.85%
Values	Daily Returns

Fentura Financial  vs.  Intesa Sanpaolo SpA

Fentura Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fentura Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Fentura Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Intesa Sanpaolo showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fentura Financial and Intesa Sanpaolo

The main advantage of trading using opposite Fentura Financial and Intesa Sanpaolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fentura Financial 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 Fentura Financial 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.