Correlation Between TELECOM ITALIA and Lendlease
Can any of the company-specific risk be diversified away by investing in both TELECOM ITALIA and Lendlease 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 Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TELECOM ITALIA and Lendlease Group, you can compare the effects of market volatilities on TELECOM ITALIA and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELECOM ITALIA and Lendlease.
Diversification Opportunities for TELECOM ITALIA and Lendlease
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TELECOM and Lendlease is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding TELECOM ITALIA and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 are associated (or correlated) with Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of TELECOM ITALIA i.e., TELECOM ITALIA and Lendlease go up and down completely randomly.
Pair Corralation between TELECOM ITALIA and Lendlease
Assuming the 90 days trading horizon TELECOM ITALIA is expected to generate 1.38 times more return on investment than Lendlease. However, TELECOM ITALIA is 1.38 times more volatile than Lendlease Group. It trades about 0.01 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest 30.00 in TELECOM ITALIA on November 7, 2024 and sell it today you would lose (3.00) from holding TELECOM ITALIA or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TELECOM ITALIA vs. Lendlease Group
Performance |
| Timeline |
| TELECOM ITALIA |
| Lendlease Group |
TELECOM ITALIA and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TELECOM ITALIA and Lendlease
The main advantage of trading using opposite TELECOM ITALIA and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TELECOM ITALIA position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| TELECOM ITALIA vs. Sunny Optical Technology | TELECOM ITALIA vs. SOLSTAD OFFSHORE NK | TELECOM ITALIA vs. Ribbon Communications | TELECOM ITALIA vs. Verizon Communications |
| Lendlease vs. SILVER BULLET DATA | Lendlease vs. Wizz Air Holdings | Lendlease vs. SOGECLAIR SA INH | Lendlease vs. DICKER DATA LTD |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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