Correlation Between Cellnex Telecom and Telecom Italia
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Telecom Italia 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 Cellnex Telecom and Telecom Italia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cellnex Telecom SA and Telecom Italia SpA, you can compare the effects of market volatilities on Cellnex Telecom and Telecom Italia 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 Cellnex Telecom with a short position of Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Telecom Italia.
Diversification Opportunities for Cellnex Telecom and Telecom Italia
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cellnex and Telecom is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Telecom Italia SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Italia SpA and Cellnex Telecom 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 Cellnex Telecom SA are associated (or correlated) with Telecom Italia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Italia SpA has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Telecom Italia go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Telecom Italia
Assuming the 90 days trading horizon Cellnex Telecom is expected to generate 8.05 times less return on investment than Telecom Italia. But when comparing it to its historical volatility, Cellnex Telecom SA is 2.06 times less risky than Telecom Italia. It trades about 0.05 of its potential returns per unit of risk. Telecom Italia SpA is currently generating about 0.2 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Telecom Italia SpA
Performance |
| Timeline |
| Cellnex Telecom SA |
| Telecom Italia SpA |
Cellnex Telecom and Telecom Italia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Telecom Italia
The main advantage of trading using opposite Cellnex Telecom and Telecom Italia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Telecom Italia 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 Telecom Italia will offset losses from the drop in Telecom Italia's long position.| Cellnex Telecom vs. Samsung Electronics Co | Cellnex Telecom vs. Samsung Electronics Co | Cellnex Telecom vs. Hyundai Motor | Cellnex Telecom vs. Reliance Industries Ltd |
| Telecom Italia vs. Monster Beverage Corp | Telecom Italia vs. Addtech | Telecom Italia vs. Fevertree Drinks Plc | Telecom Italia vs. Impax Asset Management |
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.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |