Correlation Between ALERION CLEANPOWER and Poste Italiane

Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER 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 ALERION CLEANPOWER and Poste Italiane into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALERION CLEANPOWER and Poste Italiane SpA, you can compare the effects of market volatilities on ALERION CLEANPOWER 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 ALERION CLEANPOWER with a short position of Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and Poste Italiane.

Diversification Opportunities for ALERION CLEANPOWER and Poste Italiane

0.23

Correlation Coefficient

ALERION CLEANPOWER  Poste Italiane

Modest diversification

The 3 months correlation between ALERION and Poste is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Poste Italiane go up and down completely randomly.

Pair Corralation between ALERION CLEANPOWER and Poste Italiane

If you would invest (100.00) in Poste Italiane SpA on October 25, 2024 and sell it today you would earn a total of  100.00  from holding Poste Italiane SpA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

ALERION CLEANPOWER  vs.  Poste Italiane SpA

ALERION CLEANPOWER

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALERION CLEANPOWER are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ALERION CLEANPOWER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Poste Italiane SpA

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Poste Italiane SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Poste Italiane reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALERION CLEANPOWER and Poste Italiane

The main advantage of trading using opposite ALERION CLEANPOWER and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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.

The idea behind ALERION CLEANPOWER and Poste Italiane SpA 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.