Correlation Between LIFEWAY FOODS and TELECOM ITALIA

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS 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 LIFEWAY FOODS and TELECOM ITALIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and TELECOM ITALIA, you can compare the effects of market volatilities on LIFEWAY FOODS 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 LIFEWAY FOODS with a short position of TELECOM ITALIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and TELECOM ITALIA.

Diversification Opportunities for LIFEWAY FOODS and TELECOM ITALIA

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between LIFEWAY and TELECOM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA and LIFEWAY FOODS 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 LIFEWAY FOODS 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 has no effect on the direction of LIFEWAY FOODS i.e., LIFEWAY FOODS and TELECOM ITALIA go up and down completely randomly.

Pair Corralation between LIFEWAY FOODS and TELECOM ITALIA

Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 4.72 times less return on investment than TELECOM ITALIA. In addition to that, LIFEWAY FOODS is 1.14 times more volatile than TELECOM ITALIA. It trades about 0.03 of its total potential returns per unit of risk. TELECOM ITALIA is currently generating about 0.18 per unit of volatility. If you would invest  33.00  in TELECOM ITALIA on April 24, 2025 and sell it today you would earn a total of  7.00  from holding TELECOM ITALIA or generate 21.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LIFEWAY FOODS  vs.  TELECOM ITALIA

 Performance 
       Timeline  
LIFEWAY FOODS 

Risk-Adjusted Performance

Weak

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

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TELECOM ITALIA 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.

LIFEWAY FOODS and TELECOM ITALIA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LIFEWAY FOODS and TELECOM ITALIA

The main advantage of trading using opposite LIFEWAY FOODS and TELECOM ITALIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS 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 LIFEWAY FOODS and TELECOM ITALIA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges