Correlation Between Poste Italiane and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Poste Italiane and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and Dow Jones.
Diversification Opportunities for Poste Italiane and Dow Jones
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Poste and Dow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Poste Italiane i.e., Poste Italiane and Dow Jones go up and down completely randomly.
Pair Corralation between Poste Italiane and Dow Jones
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 1.63 times more return on investment than Dow Jones. However, Poste Italiane is 1.63 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 819.00 in Poste Italiane SpA on September 4, 2024 and sell it today you would earn a total of 519.00 from holding Poste Italiane SpA or generate 63.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.02% |
| Values | Daily Returns |
Poste Italiane SpA vs. Dow Jones Industrial
Performance |
| Timeline |
Poste Italiane and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Poste Italiane SpA
Pair trading matchups for Poste Italiane
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Poste Italiane and Dow Jones
The main advantage of trading using opposite Poste Italiane and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Poste Italiane vs. EHEALTH | Poste Italiane vs. MagnaChip Semiconductor Corp | Poste Italiane vs. Ramsay Health Care | Poste Italiane vs. Nordic Semiconductor ASA |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |