Correlation Between Intesa Sanpaolo and KEISEI EL

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

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

Diversification Opportunities for Intesa Sanpaolo and KEISEI EL

-0.12

Correlation Coefficient

Intesa Sanpaolo  KEISEI EL

Good diversification

The 3 months correlation between Intesa and KEISEI is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and KEISEI EL RAILWAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEISEI EL RAILWAY and Intesa Sanpaolo 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 Intesa Sanpaolo SpA are associated (or correlated) with KEISEI EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEISEI EL RAILWAY has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and KEISEI EL go up and down completely randomly.

Pair Corralation between Intesa Sanpaolo and KEISEI EL

Assuming the 90 days horizon Intesa Sanpaolo SpA is expected to generate 0.79 times more return on investment than KEISEI EL. However, Intesa Sanpaolo SpA is 1.27 times less risky than KEISEI EL. It trades about 0.16 of its potential returns per unit of risk. KEISEI EL RAILWAY is currently generating about 0.0 per unit of risk. If you would invest  389.00  in Intesa Sanpaolo SpA on October 13, 2024 and sell it today you would earn a total of  13.00  from holding Intesa Sanpaolo SpA or generate 3.34% return on investment over 90 days.

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

Intesa Sanpaolo SpA  vs.  KEISEI EL RAILWAY

Intesa Sanpaolo SpA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intesa Sanpaolo SpA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Intesa Sanpaolo may actually be approaching a critical reversion point that can send shares even higher in February 2025.

KEISEI EL RAILWAY

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KEISEI EL RAILWAY are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, KEISEI EL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Intesa Sanpaolo and KEISEI EL

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

The idea behind Intesa Sanpaolo SpA and KEISEI EL RAILWAY 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.