Correlation Between Poste Italiane and ENSTAR GROUP

Can any of the company-specific risk be diversified away by investing in both Poste Italiane and ENSTAR GROUP 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 ENSTAR GROUP 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 ENSTAR GROUP LTD, you can compare the effects of market volatilities on Poste Italiane and ENSTAR GROUP 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 ENSTAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and ENSTAR GROUP.

Diversification Opportunities for Poste Italiane and ENSTAR GROUP

0.0

Correlation Coefficient

Poste Italiane  ENSTAR GROUP

Pay attention - limited upside

The 3 months correlation between Poste and ENSTAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and ENSTAR GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENSTAR GROUP LTD 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 ENSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENSTAR GROUP LTD has no effect on the direction of Poste Italiane i.e., Poste Italiane and ENSTAR GROUP go up and down completely randomly.

Pair Corralation between Poste Italiane and ENSTAR GROUP

If you would invest  30,400  in ENSTAR GROUP LTD on December 29, 2024 and sell it today you would earn a total of  600.00  from holding ENSTAR GROUP LTD or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Poste Italiane SpA  vs.  ENSTAR GROUP LTD

Poste Italiane SpA

Risk-Adjusted Performance

Strong

Over the last 90 days Poste Italiane SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Poste Italiane is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ENSTAR GROUP LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENSTAR GROUP LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ENSTAR GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Poste Italiane and ENSTAR GROUP

The main advantage of trading using opposite Poste Italiane and ENSTAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane position performs unexpectedly, ENSTAR GROUP 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 ENSTAR GROUP will offset losses from the drop in ENSTAR GROUP's long position.

The idea behind Poste Italiane SpA and ENSTAR GROUP LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.