Correlation Between Telecom Italia and Bell Food
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on Telecom Italia and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Bell Food.
Diversification Opportunities for Telecom Italia and Bell Food
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telecom and Bell is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Telecom Italia i.e., Telecom Italia and Bell Food go up and down completely randomly.
Pair Corralation between Telecom Italia and Bell Food
Assuming the 90 days trading horizon Telecom Italia SpA is expected to generate 4.14 times more return on investment than Bell Food. However, Telecom Italia is 4.14 times more volatile than Bell Food Group. It trades about 0.2 of its potential returns per unit of risk. Bell Food Group is currently generating about 0.03 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 Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telecom Italia SpA vs. Bell Food Group
Performance |
| Timeline |
| Telecom Italia SpA |
| Bell Food Group |
Telecom Italia and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Bell Food
The main advantage of trading using opposite Telecom Italia and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food'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 |
| Bell Food vs. Samsung Electronics Co | Bell Food vs. Samsung Electronics Co | Bell Food vs. Hyundai Motor | Bell Food 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |