Correlation Between Telecom Italia and U S Cellular
Can any of the company-specific risk be diversified away by investing in both Telecom Italia and U S Cellular 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 U S Cellular 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 United States Cellular, you can compare the effects of market volatilities on Telecom Italia and U S Cellular 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 U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and U S Cellular.
Diversification Opportunities for Telecom Italia and U S Cellular
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telecom and USM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Telecom Italia i.e., Telecom Italia and U S Cellular go up and down completely randomly.
Pair Corralation between Telecom Italia and U S Cellular
If you would invest 6,207 in United States Cellular on August 28, 2024 and sell it today you would earn a total of 176.00 from holding United States Cellular or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Telecom Italia SpA vs. United States Cellular
Performance |
| Timeline |
| Telecom Italia SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United States Cellular |
Telecom Italia and U S Cellular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Italia and U S Cellular
The main advantage of trading using opposite Telecom Italia and U S Cellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, U S Cellular 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 U S Cellular will offset losses from the drop in U S Cellular'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 |
| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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