Correlation Between Telecom Italia and CEMEX SAB

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

Diversification Opportunities for Telecom Italia and CEMEX SAB

0.0

Correlation Coefficient

Telecom Italia  CEMEX SAB

Pay attention - limited upside

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

Pair Corralation between Telecom Italia and CEMEX SAB

If you would invest  60.00  in CEMEX SAB de on May 7, 2025 and sell it today you would earn a total of  27.00  from holding CEMEX SAB de or generate 45.0% 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.  CEMEX SAB de

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.

CEMEX SAB de

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CEMEX SAB de are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CEMEX SAB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telecom Italia and CEMEX SAB

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

The idea behind Telecom Italia SpA and CEMEX SAB de 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.