Correlation Between Telecom Italia and ATT
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Telecom Italia and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and ATT.
Diversification Opportunities for Telecom Italia and ATT
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telecom and ATT is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Telecom Italia i.e., Telecom Italia and ATT go up and down completely randomly.
Pair Corralation between Telecom Italia and ATT
If you would invest 327.00 in Telecom Italia SpA on August 27, 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 Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Telecom Italia SpA vs. ATT Inc
Performance |
| Timeline |
| Telecom Italia SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ATT Inc |
Telecom Italia and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and ATT
The main advantage of trading using opposite Telecom Italia and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT'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 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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