Correlation Between Poste Italiane and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Poste Italiane and Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma, you can compare the effects of market volatilities on Poste Italiane and Astellas Pharma 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 Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and Astellas Pharma.
Diversification Opportunities for Poste Italiane and Astellas Pharma
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Poste and Astellas is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Poste Italiane i.e., Poste Italiane and Astellas Pharma go up and down completely randomly.
Pair Corralation between Poste Italiane and Astellas Pharma
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 0.57 times more return on investment than Astellas Pharma. However, Poste Italiane SpA is 1.76 times less risky than Astellas Pharma. It trades about 0.12 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.03 per unit of risk. If you would invest 810.00 in Poste Italiane SpA on November 27, 2024 and sell it today you would earn a total of 678.00 from holding Poste Italiane SpA or generate 83.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poste Italiane SpA vs. Astellas Pharma
Performance |
| Timeline |
| Poste Italiane SpA |
| Astellas Pharma |
Poste Italiane and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and Astellas Pharma
The main advantage of trading using opposite Poste Italiane and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| Poste Italiane vs. Grand Canyon Education | Poste Italiane vs. DeVry Education Group | Poste Italiane vs. EMBARK EDUCATION LTD | Poste Italiane vs. STRAYER EDUCATION |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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