Correlation Between America Movil and T Mobile

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

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

Diversification Opportunities for America Movil and T Mobile

-0.52

Correlation Coefficient

America Movil  T Mobile

Excellent diversification

The 3 months correlation between America and TMUS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and America Movil 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 America Movil SAB 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 America Movil i.e., America Movil and T Mobile go up and down completely randomly.

Pair Corralation between America Movil and T Mobile

Considering the 90-day investment horizon America Movil SAB is expected to under-perform the T Mobile. But the stock apears to be less risky and, when comparing its historical volatility, America Movil SAB is 1.08 times less risky than T Mobile. The stock trades about -0.12 of its potential returns per unit of risk. The T Mobile is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  20,562  in T Mobile on September 28, 2024 and sell it today you would earn a total of  1,806  from holding T Mobile or generate 8.78% return on investment over 90 days.

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

America Movil SAB  vs.  T Mobile

America Movil SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Movil SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

T Mobile

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T Mobile may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with America Movil and T Mobile

The main advantage of trading using opposite America Movil and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Movil 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 America Movil SAB 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 Transaction History module to view history of all your transactions and understand their impact on performance.