Correlation Between NEXON and TELECOM ITALIA
Can any of the company-specific risk be diversified away by investing in both NEXON 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 NEXON and TELECOM ITALIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and TELECOM ITALIA, you can compare the effects of market volatilities on NEXON 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 NEXON with a short position of TELECOM ITALIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and TELECOM ITALIA.
Diversification Opportunities for NEXON and TELECOM ITALIA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXON and TELECOM is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA and NEXON 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 NEXON Co 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 NEXON i.e., NEXON and TELECOM ITALIA go up and down completely randomly.
Pair Corralation between NEXON and TELECOM ITALIA
Assuming the 90 days horizon NEXON is expected to generate 1.68 times less return on investment than TELECOM ITALIA. In addition to that, NEXON is 1.07 times more volatile than TELECOM ITALIA. It trades about 0.04 of its total potential returns per unit of risk. TELECOM ITALIA is currently generating about 0.07 per unit of volatility. If you would invest 45.00 in TELECOM ITALIA on August 14, 2025 and sell it today you would earn a total of 4.00 from holding TELECOM ITALIA or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
NEXON Co vs. TELECOM ITALIA
Performance |
| Timeline |
| NEXON |
| TELECOM ITALIA |
NEXON and TELECOM ITALIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and TELECOM ITALIA
The main advantage of trading using opposite NEXON and TELECOM ITALIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON 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.| NEXON vs. EEDUCATION ALBERT AB | NEXON vs. CAREER EDUCATION | NEXON vs. Perdoceo Education | NEXON vs. Xinhua Winshare Publishing |
| TELECOM ITALIA vs. Guidewire Software | TELECOM ITALIA vs. HIGH QUALITY FOOD | TELECOM ITALIA vs. OPERA SOFTWARE | TELECOM ITALIA vs. SENECA FOODS A |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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