Correlation Between MOBILE FACTORY and T-Mobile

Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and T-Mobile 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 MOBILE FACTORY and T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOBILE FACTORY INC and T Mobile, you can compare the effects of market volatilities on MOBILE FACTORY and T-Mobile 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 MOBILE FACTORY with a short position of T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and T-Mobile.

Diversification Opportunities for MOBILE FACTORY and T-Mobile

0.48

Correlation Coefficient

MOBILE FACTORY  T-Mobile

Very weak diversification

The 3 months correlation between MOBILE and T-Mobile is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and T-Mobile go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and T-Mobile

Assuming the 90 days horizon MOBILE FACTORY is expected to generate 8.43 times less return on investment than T-Mobile. But when comparing it to its historical volatility, MOBILE FACTORY INC is 1.28 times less risky than T-Mobile. It trades about 0.02 of its potential returns per unit of risk. T Mobile is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  21,032  in T Mobile on December 20, 2024 and sell it today you would earn a total of  2,903  from holding T Mobile or generate 13.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MOBILE FACTORY INC  vs.  T Mobile

MOBILE FACTORY INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MOBILE FACTORY is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

T Mobile

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, T-Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOBILE FACTORY and T-Mobile

The main advantage of trading using opposite MOBILE FACTORY and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, T-Mobile 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 T-Mobile will offset losses from the drop in T-Mobile's long position.

The idea behind MOBILE FACTORY INC and T Mobile 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.