Correlation Between Apple and TELECOM ITALIA
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and TELECOM ITALIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and TELECOM ITALIA, you can compare the effects of market volatilities on Apple 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 Apple with a short position of TELECOM ITALIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and TELECOM ITALIA.
Diversification Opportunities for Apple and TELECOM ITALIA
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apple and TELECOM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA and Apple 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 Apple Inc 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 has no effect on the direction of Apple i.e., Apple and TELECOM ITALIA go up and down completely randomly.
Pair Corralation between Apple and TELECOM ITALIA
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.5 times more return on investment than TELECOM ITALIA. However, Apple Inc is 2.0 times less risky than TELECOM ITALIA. It trades about 0.09 of its potential returns per unit of risk. TELECOM ITALIA is currently generating about 0.01 per unit of risk. If you would invest 12,808 in Apple Inc on October 13, 2024 and sell it today you would earn a total of 10,142 from holding Apple Inc or generate 79.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. TELECOM ITALIA
Performance |
| Timeline |
| Apple Inc |
| TELECOM ITALIA |
Apple and TELECOM ITALIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and TELECOM ITALIA
The main advantage of trading using opposite Apple and TELECOM ITALIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. SCANSOURCE | Apple vs. Zijin Mining Group | Apple vs. Shenandoah Telecommunications | Apple vs. ADRIATIC METALS LS 013355 |
| TELECOM ITALIA vs. Apple Inc | TELECOM ITALIA vs. Apple Inc | TELECOM ITALIA vs. Apple Inc | TELECOM ITALIA vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |