Correlation Between PPHE HOTEL and T MOBILE

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

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

Diversification Opportunities for PPHE HOTEL and T MOBILE

-0.32

Correlation Coefficient

PPHE HOTEL  T MOBILE

Very good diversification

The 3 months correlation between PPHE and TM5 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and T MOBILE US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE US and PPHE HOTEL 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 PPHE HOTEL GROUP 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 US has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and T MOBILE go up and down completely randomly.

Pair Corralation between PPHE HOTEL and T MOBILE

Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 1.16 times more return on investment than T MOBILE. However, PPHE HOTEL is 1.16 times more volatile than T MOBILE US. It trades about 0.04 of its potential returns per unit of risk. T MOBILE US is currently generating about -0.01 per unit of risk. If you would invest  1,410  in PPHE HOTEL GROUP on October 26, 2024 and sell it today you would earn a total of  50.00  from holding PPHE HOTEL GROUP or generate 3.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

PPHE HOTEL GROUP  vs.  T MOBILE US

PPHE HOTEL GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PPHE HOTEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

T MOBILE US

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T MOBILE US has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, T MOBILE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PPHE HOTEL and T MOBILE

The main advantage of trading using opposite PPHE HOTEL and T MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL 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 PPHE HOTEL GROUP and T MOBILE US 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 Commodity Directory module to find actively traded commodities issued by global exchanges.