Correlation Between Intuitive Investments and FinecoBank SpA

Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and FinecoBank SpA 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 Intuitive Investments and FinecoBank SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Intuitive Investments and FinecoBank SpA

-0.38

Correlation Coefficient

Intuitive Investments  FinecoBank SpA

Very good diversification

The 3 months correlation between Intuitive and FinecoBank is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and FinecoBank SpA go up and down completely randomly.

Pair Corralation between Intuitive Investments and FinecoBank SpA

Assuming the 90 days trading horizon Intuitive Investments is expected to generate 16.38 times less return on investment than FinecoBank SpA. In addition to that, Intuitive Investments is 1.38 times more volatile than FinecoBank SpA. It trades about 0.0 of its total potential returns per unit of risk. FinecoBank SpA is currently generating about 0.11 per unit of volatility. If you would invest  1,680  in FinecoBank SpA on December 26, 2024 and sell it today you would earn a total of  195.00  from holding FinecoBank SpA or generate 11.61% return on investment over 90 days.

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

Intuitive Investments Group  vs.  FinecoBank SpA

Intuitive Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

FinecoBank SpA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FinecoBank SpA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, FinecoBank SpA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intuitive Investments and FinecoBank SpA

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

The idea behind Intuitive Investments Group and FinecoBank 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.