Correlation Between Telecom Italia and CAP LEASE

Can any of the company-specific risk be diversified away by investing in both Telecom Italia and CAP LEASE 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 CAP LEASE 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 CAP LEASE AVIATION, you can compare the effects of market volatilities on Telecom Italia and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and CAP LEASE.

Diversification Opportunities for Telecom Italia and CAP LEASE

0.0

Correlation Coefficient

Telecom Italia  CAP LEASE

Pay attention - limited upside

The 3 months correlation between Telecom and CAP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Telecom Italia i.e., Telecom Italia and CAP LEASE go up and down completely randomly.

Pair Corralation between Telecom Italia and CAP LEASE

If you would invest  38.00  in Telecom Italia SpA on April 23, 2025 and sell it today you would earn a total of  7.00  from holding Telecom Italia SpA or generate 18.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Telecom Italia SpA  vs.  CAP LEASE AVIATION

Telecom Italia SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telecom Italia SpA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Telecom Italia unveiled solid returns over the last few months and may actually be approaching a breakup point.

CAP LEASE AVIATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CAP LEASE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Telecom Italia and CAP LEASE

The main advantage of trading using opposite Telecom Italia and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Italia position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.

The idea behind Telecom Italia SpA and CAP LEASE AVIATION 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 CEOs Directory module to screen CEOs from public companies around the world.