Correlation Between TELECOM ITALIA and MAROC TELECOM

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

By analyzing existing cross correlation between TELECOM ITALIA and MAROC TELECOM, you can compare the effects of market volatilities on TELECOM ITALIA and MAROC TELECOM 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 MAROC TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELECOM ITALIA and MAROC TELECOM.

Diversification Opportunities for TELECOM ITALIA and MAROC TELECOM

0.61

Correlation Coefficient

TELECOM ITALIA  MAROC TELECOM

Poor diversification

The 3 months correlation between TELECOM and MAROC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding TELECOM ITALIA and MAROC TELECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAROC TELECOM 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 are associated (or correlated) with MAROC TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAROC TELECOM has no effect on the direction of TELECOM ITALIA i.e., TELECOM ITALIA and MAROC TELECOM go up and down completely randomly.

Pair Corralation between TELECOM ITALIA and MAROC TELECOM

Assuming the 90 days trading horizon TELECOM ITALIA is expected to generate 1.26 times more return on investment than MAROC TELECOM. However, TELECOM ITALIA is 1.26 times more volatile than MAROC TELECOM. It trades about 0.17 of its potential returns per unit of risk. MAROC TELECOM is currently generating about 0.11 per unit of risk. If you would invest  33.00  in TELECOM ITALIA on April 22, 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 Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

TELECOM ITALIA  vs.  MAROC TELECOM

TELECOM ITALIA

Risk-Adjusted Performance

Good

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 unsteady basic indicators, TELECOM ITALIA unveiled solid returns over the last few months and may actually be approaching a breakup point.

MAROC TELECOM

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAROC TELECOM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, MAROC TELECOM may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TELECOM ITALIA and MAROC TELECOM

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

The idea behind TELECOM ITALIA and MAROC TELECOM 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.