Correlation Between UNICREDIT SPA and FIRST SAVINGS

Can any of the company-specific risk be diversified away by investing in both UNICREDIT SPA and FIRST SAVINGS 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 UNICREDIT SPA and FIRST SAVINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNICREDIT SPA ADR and FIRST SAVINGS FINL, you can compare the effects of market volatilities on UNICREDIT SPA and FIRST SAVINGS 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 UNICREDIT SPA with a short position of FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNICREDIT SPA and FIRST SAVINGS.

Diversification Opportunities for UNICREDIT SPA and FIRST SAVINGS

0.14

Correlation Coefficient

UNICREDIT SPA  FIRST SAVINGS

Average diversification

The 3 months correlation between UNICREDIT and FIRST is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding UNICREDIT SPA ADR and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL and UNICREDIT SPA 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 UNICREDIT SPA ADR are associated (or correlated) with FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of UNICREDIT SPA i.e., UNICREDIT SPA and FIRST SAVINGS go up and down completely randomly.

Pair Corralation between UNICREDIT SPA and FIRST SAVINGS

Assuming the 90 days trading horizon UNICREDIT SPA ADR is expected to generate 0.66 times more return on investment than FIRST SAVINGS. However, UNICREDIT SPA ADR is 1.51 times less risky than FIRST SAVINGS. It trades about 0.18 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about 0.02 per unit of risk. If you would invest  2,440  in UNICREDIT SPA ADR on April 23, 2025 and sell it today you would earn a total of  460.00  from holding UNICREDIT SPA ADR or generate 18.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

UNICREDIT SPA ADR  vs.  FIRST SAVINGS FINL

UNICREDIT SPA ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNICREDIT SPA ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, UNICREDIT SPA reported solid returns over the last few months and may actually be approaching a breakup point.

FIRST SAVINGS FINL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST SAVINGS FINL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FIRST SAVINGS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with UNICREDIT SPA and FIRST SAVINGS

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

The idea behind UNICREDIT SPA ADR and FIRST SAVINGS FINL 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.