Correlation Between Telecom Italia and Made Tech
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Telecom Italia and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Made Tech.
Diversification Opportunities for Telecom Italia and Made Tech
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telecom and Made is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Telecom Italia i.e., Telecom Italia and Made Tech go up and down completely randomly.
Pair Corralation between Telecom Italia and Made Tech
Assuming the 90 days trading horizon Telecom Italia SpA is expected to under-perform the Made Tech. But the stock apears to be less risky and, when comparing its historical volatility, Telecom Italia SpA is 2.45 times less risky than Made Tech. The stock trades about -0.06 of its potential returns per unit of risk. The Made Tech Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,625 in Made Tech Group on August 26, 2024 and sell it today you would earn a total of 600.00 from holding Made Tech Group or generate 36.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Italia SpA vs. Made Tech Group
Performance |
| Timeline |
| Telecom Italia SpA |
| Made Tech Group |
Telecom Italia and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Made Tech
The main advantage of trading using opposite Telecom Italia and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Telecom Italia vs. Compal Electronics GDR | Telecom Italia vs. AfriTin Mining | Telecom Italia vs. Greenroc Mining PLC | Telecom Italia vs. McEwen Mining |
| Made Tech vs. Norman Broadbent Plc | Made Tech vs. GreenX Metals | Made Tech vs. Europa Metals | Made Tech vs. Silvercorp Metals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |