Correlation Between TELECOM ITALIA and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both TELECOM ITALIA and Allegheny Technologies 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 Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TELECOM ITALIA and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on TELECOM ITALIA and Allegheny Technologies 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 Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TELECOM ITALIA and Allegheny Technologies.
Diversification Opportunities for TELECOM ITALIA and Allegheny Technologies
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TELECOM and Allegheny is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TELECOM ITALIA and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of TELECOM ITALIA i.e., TELECOM ITALIA and Allegheny Technologies go up and down completely randomly.
Pair Corralation between TELECOM ITALIA and Allegheny Technologies
Assuming the 90 days trading horizon TELECOM ITALIA is expected to generate 4.74 times less return on investment than Allegheny Technologies. In addition to that, TELECOM ITALIA is 1.01 times more volatile than Allegheny Technologies Incorporated. It trades about 0.04 of its total potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.19 per unit of volatility. If you would invest 6,294 in Allegheny Technologies Incorporated on August 24, 2025 and sell it today you would earn a total of 1,948 from holding Allegheny Technologies Incorporated or generate 30.95% 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. Allegheny Technologies Incorpo
Performance |
| Timeline |
| TELECOM ITALIA |
| Allegheny Technologies |
TELECOM ITALIA and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TELECOM ITALIA and Allegheny Technologies
The main advantage of trading using opposite TELECOM ITALIA and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TELECOM ITALIA position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.| TELECOM ITALIA vs. REMEDY ENTERTAINMENT OYJ | TELECOM ITALIA vs. ATOSS SOFTWARE | TELECOM ITALIA vs. SBM OFFSHORE | TELECOM ITALIA vs. GBS Software AG |
| Allegheny Technologies vs. Apple Inc | Allegheny Technologies vs. Apple Inc | Allegheny Technologies vs. Microsoft | Allegheny Technologies vs. Microsoft |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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