Correlation Between Telecom Italia and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on Telecom Italia and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Lendinvest PLC.
Diversification Opportunities for Telecom Italia and Lendinvest PLC
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telecom and Lendinvest is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Telecom Italia i.e., Telecom Italia and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Telecom Italia and Lendinvest PLC
Assuming the 90 days trading horizon Telecom Italia is expected to generate 4.07 times less return on investment than Lendinvest PLC. In addition to that, Telecom Italia is 1.23 times more volatile than Lendinvest PLC. It trades about 0.07 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about 0.36 per unit of volatility. If you would invest 2,350 in Lendinvest PLC on November 27, 2024 and sell it today you would earn a total of 400.00 from holding Lendinvest PLC or generate 17.02% 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. Lendinvest PLC
Performance |
| Timeline |
| Telecom Italia SpA |
| Lendinvest PLC |
Telecom Italia and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Lendinvest PLC
The main advantage of trading using opposite Telecom Italia and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Telecom Italia vs. Gamma Communications PLC | Telecom Italia vs. British American Tobacco | Telecom Italia vs. Solstad Offshore ASA | Telecom Italia vs. Batm Advanced Communications |
| Lendinvest PLC vs. Livermore Investments Group | Lendinvest PLC vs. Lloyds Banking Group | Lendinvest PLC vs. Liechtensteinische Landesbank AG | Lendinvest PLC vs. National Beverage Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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