Correlation Between EHEALTH and Poste Italiane
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Poste Italiane 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 EHEALTH and Poste Italiane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Poste Italiane SpA, you can compare the effects of market volatilities on EHEALTH and Poste Italiane 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 EHEALTH with a short position of Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Poste Italiane.
Diversification Opportunities for EHEALTH and Poste Italiane
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EHEALTH and Poste is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Poste Italiane SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poste Italiane SpA and EHEALTH 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 EHEALTH are associated (or correlated) with Poste Italiane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poste Italiane SpA has no effect on the direction of EHEALTH i.e., EHEALTH and Poste Italiane go up and down completely randomly.
Pair Corralation between EHEALTH and Poste Italiane
Assuming the 90 days trading horizon EHEALTH is expected to generate 4.51 times more return on investment than Poste Italiane. However, EHEALTH is 4.51 times more volatile than Poste Italiane SpA. It trades about 0.08 of its potential returns per unit of risk. Poste Italiane SpA is currently generating about 0.17 per unit of risk. If you would invest 489.00 in EHEALTH on September 12, 2024 and sell it today you would earn a total of 30.00 from holding EHEALTH or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. Poste Italiane SpA
Performance |
| Timeline |
| EHEALTH |
| Poste Italiane SpA |
EHEALTH and Poste Italiane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Poste Italiane
The main advantage of trading using opposite EHEALTH and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Poste Italiane 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 Poste Italiane will offset losses from the drop in Poste Italiane's long position.| EHEALTH vs. PREMIER FOODS | EHEALTH vs. Commonwealth Bank of | EHEALTH vs. ASSOC BR FOODS | EHEALTH vs. Thai Beverage Public |
| Poste Italiane vs. ITOCHU | Poste Italiane vs. Marubeni | Poste Italiane vs. Sumitomo | Poste Italiane vs. Superior Plus Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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