Correlation Between Poste Italiane and CDW
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and CDW 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 CDW 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 CDW Corporation, you can compare the effects of market volatilities on Poste Italiane and CDW 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 CDW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and CDW.
Diversification Opportunities for Poste Italiane and CDW
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Poste and CDW is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and CDW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corporation 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 CDW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corporation has no effect on the direction of Poste Italiane i.e., Poste Italiane and CDW go up and down completely randomly.
Pair Corralation between Poste Italiane and CDW
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 0.43 times more return on investment than CDW. However, Poste Italiane SpA is 2.32 times less risky than CDW. It trades about 0.22 of its potential returns per unit of risk. CDW Corporation is currently generating about -0.11 per unit of risk. If you would invest 1,257 in Poste Italiane SpA on August 31, 2024 and sell it today you would earn a total of 63.00 from holding Poste Italiane SpA or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Poste Italiane SpA vs. CDW Corp.
Performance |
| Timeline |
| Poste Italiane SpA |
| CDW Corporation |
Poste Italiane and CDW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and CDW
The main advantage of trading using opposite Poste Italiane and CDW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, CDW 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 CDW will offset losses from the drop in CDW's long position.| Poste Italiane vs. MTI WIRELESS EDGE | Poste Italiane vs. Wizz Air Holdings | Poste Italiane vs. MYFAIR GOLD P | Poste Italiane vs. Tower One Wireless |
| CDW vs. AVITA Medical | CDW vs. SCANDMEDICAL SOLDK 040 | CDW vs. Cogent Communications Holdings | CDW vs. Merit Medical Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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