Correlation Between Telecom Italia and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Telecom Italia and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Samsung Electronics.
Diversification Opportunities for Telecom Italia and Samsung Electronics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Telecom and Samsung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Telecom Italia i.e., Telecom Italia and Samsung Electronics go up and down completely randomly.
Pair Corralation between Telecom Italia and Samsung Electronics
Assuming the 90 days trading horizon Telecom Italia SpA is expected to generate 1.3 times more return on investment than Samsung Electronics. However, Telecom Italia is 1.3 times more volatile than Samsung Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.12 per unit of risk. If you would invest 26.00 in Telecom Italia SpA on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Telecom Italia SpA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Italia SpA vs. Samsung Electronics Co
Performance |
| Timeline |
| Telecom Italia SpA |
| Samsung Electronics |
Telecom Italia and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and Samsung Electronics
The main advantage of trading using opposite Telecom Italia and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Telecom Italia vs. Samsung Electronics Co | Telecom Italia vs. Samsung Electronics Co | Telecom Italia vs. Hyundai Motor | Telecom Italia vs. Toyota Motor Corp |
| Samsung Electronics vs. Berkshire Hathaway | Samsung Electronics vs. Chocoladefabriken Lindt Spruengli | Samsung Electronics vs. Rockwood Realisation PLC | Samsung Electronics vs. Toyota Motor 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 Stocks Directory module to find actively traded stocks across global markets.
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