Correlation Between Telecom Italia and Accor SA

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

By analyzing existing cross correlation between Telecom Italia SpA and Accor SA, you can compare the effects of market volatilities on Telecom Italia and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and Accor SA.

Diversification Opportunities for Telecom Italia and Accor SA

0.0

Correlation Coefficient

Telecom Italia  Accor SA

Pay attention - limited upside

The 3 months correlation between Telecom and Accor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia SpA and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA 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 SpA are associated (or correlated) with Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of Telecom Italia i.e., Telecom Italia and Accor SA go up and down completely randomly.

Pair Corralation between Telecom Italia and Accor SA

If you would invest  1,042  in Accor SA on May 14, 2025 and sell it today you would earn a total of  22.00  from holding Accor SA or generate 2.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Telecom Italia SpA  vs.  Accor SA

Telecom Italia SpA

Risk-Adjusted Performance

Weakest

Over the last 90 days Telecom Italia SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Telecom Italia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Accor SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accor SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Accor SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telecom Italia and Accor SA

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

The idea behind Telecom Italia SpA and Accor SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.