Correlation Between Poste Italiane and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha 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 Bayer Aktiengesellschaft, you can compare the effects of market volatilities on Poste Italiane and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and Bayer Aktiengesellscha.
Diversification Opportunities for Poste Italiane and Bayer Aktiengesellscha
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Poste and Bayer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft 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 Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of Poste Italiane i.e., Poste Italiane and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between Poste Italiane and Bayer Aktiengesellscha
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 0.93 times more return on investment than Bayer Aktiengesellscha. However, Poste Italiane SpA is 1.07 times less risky than Bayer Aktiengesellscha. It trades about 0.0 of its potential returns per unit of risk. Bayer Aktiengesellschaft is currently generating about -0.03 per unit of risk. If you would invest 1,619 in Poste Italiane SpA on January 12, 2025 and sell it today you would lose (28.00) from holding Poste Italiane SpA or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poste Italiane SpA vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| Poste Italiane SpA |
| Bayer Aktiengesellschaft |
Poste Italiane and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and Bayer Aktiengesellscha
The main advantage of trading using opposite Poste Italiane and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, Bayer Aktiengesellscha 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 Bayer Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha's long position.| Poste Italiane vs. Honeywell International | Poste Italiane vs. Mitsubishi | Poste Italiane vs. Hitachi | Poste Italiane vs. ITOCHU |
| Bayer Aktiengesellscha vs. Johnson Johnson | Bayer Aktiengesellscha vs. Merck Co | Bayer Aktiengesellscha vs. Roche Holding Ltd | Bayer Aktiengesellscha vs. Amgen Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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