Correlation Between Telecom Italia and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Grieg Seafood 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 Telecom Italia and Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Italia SpA and Grieg Seafood, you can compare the effects of market volatilities on Telecom Italia and Grieg Seafood 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 Telecom Italia with a short position of Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Grieg Seafood.
Diversification Opportunities for Telecom Italia and Grieg Seafood
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telecom and Grieg is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood and Telecom Italia 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 Telecom Italia SpA are associated (or correlated) with Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Telecom Italia i.e., Telecom Italia and Grieg Seafood go up and down completely randomly.
Pair Corralation between Telecom Italia and Grieg Seafood
Assuming the 90 days trading horizon Telecom Italia SpA is expected to generate 1.22 times more return on investment than Grieg Seafood. However, Telecom Italia is 1.22 times more volatile than Grieg Seafood. It trades about 0.2 of its potential returns per unit of risk. Grieg Seafood is currently generating about 0.09 per unit of risk. If you would invest 26.00 in Telecom Italia SpA on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Telecom Italia SpA or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Italia SpA vs. Grieg Seafood
Performance |
| Timeline |
| Telecom Italia SpA |
| Grieg Seafood |
Telecom Italia and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Grieg Seafood
The main advantage of trading using opposite Telecom Italia and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Telecom Italia vs. Monster Beverage Corp | Telecom Italia vs. Addtech | Telecom Italia vs. Fevertree Drinks Plc | Telecom Italia vs. Impax Asset Management |
| Grieg Seafood vs. Samsung Electronics Co | Grieg Seafood vs. Samsung Electronics Co | Grieg Seafood vs. Hyundai Motor | Grieg Seafood vs. Reliance Industries Ltd |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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