Correlation Between Aptitude Software and Telecom Italia

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

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

Diversification Opportunities for Aptitude Software and Telecom Italia

0.76

Correlation Coefficient

Aptitude Software  Telecom Italia

Poor diversification

The 3 months correlation between Aptitude and Telecom is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group 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 Aptitude Software 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 Aptitude Software Group 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 Aptitude Software i.e., Aptitude Software and Telecom Italia go up and down completely randomly.

Pair Corralation between Aptitude Software and Telecom Italia

Assuming the 90 days trading horizon Aptitude Software is expected to generate 3.64 times less return on investment than Telecom Italia. In addition to that, Aptitude Software is 1.29 times more volatile than Telecom Italia SpA. It trades about 0.04 of its total potential returns per unit of risk. Telecom Italia SpA is currently generating about 0.17 per unit of volatility. If you would invest  38.00  in Telecom Italia SpA on April 22, 2025 and sell it today you would earn a total of  8.00  from holding Telecom Italia SpA or generate 21.05% return on investment over 90 days.

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

Aptitude Software Group  vs.  Telecom Italia SpA

Aptitude Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptitude Software Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aptitude Software is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 13 (%) 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.

Pair Trading with Aptitude Software and Telecom Italia

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

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.