Correlation Between Poste Italiane and W P
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and W P 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 W P 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 W P Carey, you can compare the effects of market volatilities on Poste Italiane and W P 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 W P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and W P.
Diversification Opportunities for Poste Italiane and W P
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Poste and WPY is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey 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 W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of Poste Italiane i.e., Poste Italiane and W P go up and down completely randomly.
Pair Corralation between Poste Italiane and W P
Assuming the 90 days horizon Poste Italiane is expected to generate 1.47 times less return on investment than W P. In addition to that, Poste Italiane is 1.0 times more volatile than W P Carey. It trades about 0.1 of its total potential returns per unit of risk. W P Carey is currently generating about 0.15 per unit of volatility. If you would invest 5,292 in W P Carey on August 28, 2024 and sell it today you would earn a total of 168.00 from holding W P Carey or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poste Italiane SpA vs. W P Carey
Performance |
| Timeline |
| Poste Italiane SpA |
| W P Carey |
Poste Italiane and W P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and W P
The main advantage of trading using opposite Poste Italiane and W P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, W P 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 W P will offset losses from the drop in W P's long position.| Poste Italiane vs. Hyrican Informationssysteme Aktiengesellschaft | Poste Italiane vs. PUBLIC STORAGE PRFO | Poste Italiane vs. MICRONIC MYDATA | Poste Italiane vs. Playtech plc |
| W P vs. Superior Plus Corp | W P vs. NMI Holdings | W P vs. Origin Agritech | W P vs. SIVERS SEMICONDUCTORS AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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