Correlation Between Fidelity National and T Mobile

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

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

Diversification Opportunities for Fidelity National and T Mobile

-0.79

Correlation Coefficient

Fidelity National  T Mobile

Pay attention - limited upside

The 3 months correlation between Fidelity and T1MU34 is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and T Mobile go up and down completely randomly.

Pair Corralation between Fidelity National and T Mobile

Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the T Mobile. In addition to that, Fidelity National is 1.05 times more volatile than T Mobile. It trades about -0.15 of its total potential returns per unit of risk. T Mobile is currently generating about 0.07 per unit of volatility. If you would invest  68,980  in T Mobile on December 25, 2024 and sell it today you would earn a total of  5,302  from holding T Mobile or generate 7.69% return on investment over 90 days.

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

Fidelity National Information  vs.  T Mobile

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

T Mobile

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, T Mobile may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity National and T Mobile

The main advantage of trading using opposite Fidelity National and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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 Fidelity National Information 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.