Correlation Between Telecom Italia and Mobilezone Holding
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Mobilezone Holding 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 Mobilezone Holding 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 mobilezone holding AG, you can compare the effects of market volatilities on Telecom Italia and Mobilezone Holding 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 Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Mobilezone Holding.
Diversification Opportunities for Telecom Italia and Mobilezone Holding
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telecom and Mobilezone is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding 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 Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of Telecom Italia i.e., Telecom Italia and Mobilezone Holding go up and down completely randomly.
Pair Corralation between Telecom Italia and Mobilezone Holding
Assuming the 90 days trading horizon Telecom Italia SpA is expected to generate 1.5 times more return on investment than Mobilezone Holding. However, Telecom Italia is 1.5 times more volatile than mobilezone holding AG. It trades about 0.02 of its potential returns per unit of risk. mobilezone holding AG is currently generating about -0.11 per unit of risk. If you would invest 27.00 in Telecom Italia SpA on September 24, 2024 and sell it today you would earn a total of 1.00 from holding Telecom Italia SpA or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.68% |
| Values | Daily Returns |
Telecom Italia SpA vs. mobilezone holding AG
Performance |
| Timeline |
| Telecom Italia SpA |
| mobilezone holding |
Telecom Italia and Mobilezone Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Mobilezone Holding
The main advantage of trading using opposite Telecom Italia and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.| Telecom Italia vs. Uniper SE | Telecom Italia vs. Mulberry Group PLC | Telecom Italia vs. London Security Plc | Telecom Italia vs. Triad Group PLC |
| Mobilezone Holding vs. Spotify Technology SA | Mobilezone Holding vs. Telecom Italia SpA | Mobilezone Holding vs. Scandinavian Tobacco Group | Mobilezone Holding vs. British American Tobacco |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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