Correlation Between Poste Italiane and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and AMADEUS IT 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 Poste Italiane and AMADEUS IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poste Italiane SpA and AMADEUS IT GRP, you can compare the effects of market volatilities on Poste Italiane and AMADEUS IT 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 Poste Italiane with a short position of AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and AMADEUS IT.
Diversification Opportunities for Poste Italiane and AMADEUS IT
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Poste and AMADEUS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP and Poste Italiane 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 Poste Italiane SpA are associated (or correlated) with AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of Poste Italiane i.e., Poste Italiane and AMADEUS IT go up and down completely randomly.
Pair Corralation between Poste Italiane and AMADEUS IT
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 0.91 times more return on investment than AMADEUS IT. However, Poste Italiane SpA is 1.1 times less risky than AMADEUS IT. It trades about 0.1 of its potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.01 per unit of risk. If you would invest 1,277 in Poste Italiane SpA on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Poste Italiane SpA or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Poste Italiane SpA vs. AMADEUS IT GRP
Performance |
| Timeline |
| Poste Italiane SpA |
| AMADEUS IT GRP |
Poste Italiane and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and AMADEUS IT
The main advantage of trading using opposite Poste Italiane and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT's long position.| Poste Italiane vs. Superior Plus Corp | Poste Italiane vs. NMI Holdings | Poste Italiane vs. Origin Agritech | Poste Italiane vs. SIVERS SEMICONDUCTORS AB |
| AMADEUS IT vs. USWE SPORTS AB | AMADEUS IT vs. BW OFFSHORE LTD | AMADEUS IT vs. SOLSTAD OFFSHORE NK | AMADEUS IT vs. Solstad Offshore ASA |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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