Correlation Between Telecom Italia and Supermarket Income

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

Diversification Opportunities for Telecom Italia and Supermarket Income

0.9

Correlation Coefficient

Telecom Italia  Supermarket Income

Almost no diversification

The 3 months correlation between Telecom and Supermarket is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Telecom Italia i.e., Telecom Italia and Supermarket Income go up and down completely randomly.

Pair Corralation between Telecom Italia and Supermarket Income

Assuming the 90 days trading horizon Telecom Italia SpA is expected to generate 2.13 times more return on investment than Supermarket Income. However, Telecom Italia is 2.13 times more volatile than Supermarket Income REIT. It trades about 0.22 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.11 per unit of risk. If you would invest  36.00  in Telecom Italia SpA on April 14, 2025 and sell it today you would earn a total of  10.00  from holding Telecom Italia SpA or generate 27.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Telecom Italia SpA  vs.  Supermarket Income REIT

Telecom Italia SpA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Telecom Italia SpA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Telecom Italia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Supermarket Income REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supermarket Income REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Supermarket Income may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Telecom Italia and Supermarket Income

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

The idea behind Telecom Italia SpA and Supermarket Income REIT 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.