Correlation Between Telecom Italia and PT Bank

Can any of the company-specific risk be diversified away by investing in both Telecom Italia and PT Bank 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 PT Bank 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 PT Bank Rakyat, you can compare the effects of market volatilities on Telecom Italia and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Italia and PT Bank.

Diversification Opportunities for Telecom Italia and PT Bank

0.0

Correlation Coefficient

Telecom Italia  PT Bank

Pay attention - limited upside

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

Pair Corralation between Telecom Italia and PT Bank

If you would invest  24.00  in PT Bank Rakyat on May 4, 2025 and sell it today you would lose (5.00) from holding PT Bank Rakyat or give up 20.83% of portfolio value over 90 days.

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

Telecom Italia SpA  vs.  PT Bank Rakyat

Telecom Italia SpA

Risk-Adjusted Performance

Very Weak

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 latest stock price disturbance, may contribute to short-term losses for the investors.

PT Bank Rakyat

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PT Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Telecom Italia and PT Bank

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

The idea behind Telecom Italia SpA and PT Bank Rakyat 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.