Correlation Between UNICREDIT SPA and Fastenal

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

Diversification Opportunities for UNICREDIT SPA and Fastenal

0.73

Correlation Coefficient

UNICREDIT SPA  Fastenal

Poor diversification

The 3 months correlation between UNICREDIT and Fastenal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding UNICREDIT SPA ADR and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of UNICREDIT SPA i.e., UNICREDIT SPA and Fastenal go up and down completely randomly.

Pair Corralation between UNICREDIT SPA and Fastenal

Assuming the 90 days trading horizon UNICREDIT SPA ADR is expected to generate 1.43 times more return on investment than Fastenal. However, UNICREDIT SPA is 1.43 times more volatile than Fastenal Company. It trades about 0.2 of its potential returns per unit of risk. Fastenal Company is currently generating about 0.18 per unit of risk. If you would invest  2,580  in UNICREDIT SPA ADR on May 8, 2025 and sell it today you would earn a total of  640.00  from holding UNICREDIT SPA ADR or generate 24.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

UNICREDIT SPA ADR  vs.  Fastenal Company

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 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, UNICREDIT SPA reported solid returns over the last few months and may actually be approaching a breakup point.

Fastenal

Risk-Adjusted Performance

Good

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

Pair Trading with UNICREDIT SPA and Fastenal

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

The idea behind UNICREDIT SPA ADR and Fastenal Company 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.