Correlation Between Corporacion America and Telecom Italia

Can any of the company-specific risk be diversified away by investing in both Corporacion America 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 Corporacion America and Telecom Italia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corporacion America Airports and Telecom Italia SpA, you can compare the effects of market volatilities on Corporacion America 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 Corporacion America with a short position of Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Telecom Italia.

Diversification Opportunities for Corporacion America and Telecom Italia

0.0

Correlation Coefficient

Corporacion America  Telecom Italia

Pay attention - limited upside

The 3 months correlation between Corporacion and Telecom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports 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 Corporacion America 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 Corporacion America Airports 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 Corporacion America i.e., Corporacion America and Telecom Italia go up and down completely randomly.

Pair Corralation between Corporacion America and Telecom Italia

If you would invest  1,741  in Corporacion America Airports on September 21, 2024 and sell it today you would earn a total of  148.00  from holding Corporacion America Airports or generate 8.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Corporacion America Airports  vs.  Telecom Italia SpA

Corporacion America

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corporacion America Airports are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Corporacion America may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Telecom Italia SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telecom Italia SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Telecom Italia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Corporacion America and Telecom Italia

The main advantage of trading using opposite Corporacion America and Telecom Italia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America 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.

The idea behind Corporacion America Airports and Telecom Italia SpA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.