Correlation Between CAP LEASE and Telecom Italia
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Telecom Italia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Telecom Italia SpA, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Telecom Italia.
Diversification Opportunities for CAP LEASE and Telecom Italia
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAP and Telecom is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION 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 CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Telecom Italia go up and down completely randomly.
Pair Corralation between CAP LEASE and Telecom Italia
If you would invest 29.00 in Telecom Italia SpA on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Telecom Italia SpA or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Telecom Italia SpA
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Telecom Italia SpA |
CAP LEASE and Telecom Italia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Telecom Italia
The main advantage of trading using opposite CAP LEASE and Telecom Italia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Virgin Wines UK | CAP LEASE vs. JLEN Environmental Assets | CAP LEASE vs. Seche Environnement SA | CAP LEASE vs. SMA Solar Technology |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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