Correlation Between Intesa Sanpaolo and BNP PARIBAS

Can any of the company-specific risk be diversified away by investing in both Intesa Sanpaolo and BNP PARIBAS 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 BNP PARIBAS 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 BNP PARIBAS ADR, you can compare the effects of market volatilities on Intesa Sanpaolo and BNP PARIBAS 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 BNP PARIBAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intesa Sanpaolo and BNP PARIBAS.

Diversification Opportunities for Intesa Sanpaolo and BNP PARIBAS

0.92

Correlation Coefficient

Intesa Sanpaolo  BNP PARIBAS

Almost no diversification

The 3 months correlation between Intesa and BNP is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Intesa Sanpaolo SpA and BNP PARIBAS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP PARIBAS ADR 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 BNP PARIBAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP PARIBAS ADR has no effect on the direction of Intesa Sanpaolo i.e., Intesa Sanpaolo and BNP PARIBAS go up and down completely randomly.

Pair Corralation between Intesa Sanpaolo and BNP PARIBAS

Assuming the 90 days horizon Intesa Sanpaolo is expected to generate 1.1 times less return on investment than BNP PARIBAS. But when comparing it to its historical volatility, Intesa Sanpaolo SpA is 1.01 times less risky than BNP PARIBAS. It trades about 0.16 of its potential returns per unit of risk. BNP PARIBAS ADR is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,351  in BNP PARIBAS ADR on April 24, 2025 and sell it today you would earn a total of  449.00  from holding BNP PARIBAS ADR or generate 13.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Intesa Sanpaolo SpA  vs.  BNP PARIBAS ADR

Intesa Sanpaolo SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intesa Sanpaolo SpA are ranked lower than 12 (%) 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 August 2025.

BNP PARIBAS ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BNP PARIBAS ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BNP PARIBAS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intesa Sanpaolo and BNP PARIBAS

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

The idea behind Intesa Sanpaolo SpA and BNP PARIBAS ADR 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.