Correlation Between G8 EDUCATION and T-MOBILE

Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION 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 G8 EDUCATION and T-MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G8 EDUCATION and T MOBILE US, you can compare the effects of market volatilities on G8 EDUCATION 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 G8 EDUCATION with a short position of T-MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and T-MOBILE.

Diversification Opportunities for G8 EDUCATION and T-MOBILE

-0.57

Correlation Coefficient

G8 EDUCATION  T-MOBILE

Excellent diversification

The 3 months correlation between 3EAG and T-MOBILE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION 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 G8 EDUCATION 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 G8 EDUCATION 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 G8 EDUCATION i.e., G8 EDUCATION and T-MOBILE go up and down completely randomly.

Pair Corralation between G8 EDUCATION and T-MOBILE

Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 0.67 times more return on investment than T-MOBILE. However, G8 EDUCATION is 1.49 times less risky than T-MOBILE. It trades about -0.11 of its potential returns per unit of risk. T MOBILE US is currently generating about -0.28 per unit of risk. If you would invest  80.00  in G8 EDUCATION on October 3, 2024 and sell it today you would lose (2.00) from holding G8 EDUCATION or give up 2.5% of portfolio value over 90 days.

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

G8 EDUCATION  vs.  T MOBILE US

G8 EDUCATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G8 EDUCATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

T MOBILE US

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T-MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G8 EDUCATION and T-MOBILE

The main advantage of trading using opposite G8 EDUCATION and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION 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 G8 EDUCATION 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.