Correlation Between Telecom Italia and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and XL Axiata 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 XL Axiata 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 XL Axiata Tbk, you can compare the effects of market volatilities on Telecom Italia and XL Axiata 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 XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and XL Axiata.
Diversification Opportunities for Telecom Italia and XL Axiata
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telecom and PTXKY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk 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 XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Telecom Italia i.e., Telecom Italia and XL Axiata go up and down completely randomly.
Pair Corralation between Telecom Italia and XL Axiata
If you would invest 266.00 in XL Axiata Tbk on August 24, 2024 and sell it today you would earn a total of 18.00 from holding XL Axiata Tbk or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Telecom Italia SpA vs. XL Axiata Tbk
Performance |
| Timeline |
| Telecom Italia SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| XL Axiata Tbk |
Telecom Italia and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and XL Axiata
The main advantage of trading using opposite Telecom Italia and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Telecom Italia vs. Telefonica Brasil SA | Telecom Italia vs. Orange SA ADR | Telecom Italia vs. Vodafone Group PLC | Telecom Italia vs. Grupo Televisa SAB |
| XL Axiata vs. Amrica Mvil, SAB | XL Axiata vs. Airtel Africa Plc | XL Axiata vs. ATT Inc | XL Axiata vs. FingerMotion |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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