Correlation Between Commercial Vehicle and T MOBILE

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

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

Diversification Opportunities for Commercial Vehicle and T MOBILE

-0.92

Correlation Coefficient

Commercial Vehicle  T MOBILE

Pay attention - limited upside

The 3 months correlation between Commercial and TM5 is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle i.e., Commercial Vehicle and T MOBILE go up and down completely randomly.

Pair Corralation between Commercial Vehicle and T MOBILE

Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the T MOBILE. In addition to that, Commercial Vehicle is 2.05 times more volatile than T MOBILE US. It trades about -0.11 of its total potential returns per unit of risk. T MOBILE US is currently generating about 0.19 per unit of volatility. If you would invest  18,464  in T MOBILE US on September 14, 2024 and sell it today you would earn a total of  3,816  from holding T MOBILE US or generate 20.67% return on investment over 90 days.

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

Commercial Vehicle Group  vs.  T MOBILE US

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

T MOBILE US

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 15 (%) 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 Commercial Vehicle and T MOBILE

The main advantage of trading using opposite Commercial Vehicle and T MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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 Commercial Vehicle 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.