Correlation Between SPORTING and Poste Italiane
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Poste Italiane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Poste Italiane SpA, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Poste Italiane.
Diversification Opportunities for SPORTING and Poste Italiane
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPORTING and Poste is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING 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 SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Poste Italiane go up and down completely randomly.
Pair Corralation between SPORTING and Poste Italiane
Assuming the 90 days trading horizon SPORTING is expected to under-perform the Poste Italiane. In addition to that, SPORTING is 3.89 times more volatile than Poste Italiane SpA. It trades about -0.01 of its total potential returns per unit of risk. Poste Italiane SpA is currently generating about 0.16 per unit of volatility. If you would invest 1,670 in Poste Italiane SpA on April 24, 2025 and sell it today you would earn a total of 161.00 from holding Poste Italiane SpA or generate 9.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SPORTING vs. Poste Italiane SpA
Performance |
Timeline |
SPORTING |
Poste Italiane SpA |
SPORTING and Poste Italiane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPORTING and Poste Italiane
The main advantage of trading using opposite SPORTING and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.SPORTING vs. DAIDO METAL TD | SPORTING vs. STRAYER EDUCATION | SPORTING vs. Lion One Metals | SPORTING vs. FIREWEED METALS P |
Poste Italiane vs. SPORTING | Poste Italiane vs. RESMINING UNSPADR10 | Poste Italiane vs. Zijin Mining Group | Poste Italiane vs. BII Railway Transportation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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