Correlation Between Unifique Telecomunicaes and T Mobile

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

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

Diversification Opportunities for Unifique Telecomunicaes and T Mobile

-0.34

Correlation Coefficient

Unifique Telecomunicaes  T Mobile

Very good diversification

The 3 months correlation between Unifique and T1MU34 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Unifique Telecomunicaes 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 Unifique Telecomunicaes SA 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 Unifique Telecomunicaes i.e., Unifique Telecomunicaes and T Mobile go up and down completely randomly.

Pair Corralation between Unifique Telecomunicaes and T Mobile

Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to under-perform the T Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Unifique Telecomunicaes SA is 1.31 times less risky than T Mobile. The stock trades about -0.22 of its potential returns per unit of risk. The T Mobile is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  74,443  in T Mobile on October 1, 2024 and sell it today you would lose (5,591) from holding T Mobile or give up 7.51% of portfolio value over 90 days.

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

Unifique Telecomunicaes SA  vs.  T Mobile

Unifique Telecomunicaes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifique Telecomunicaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

T Mobile

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, T Mobile sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unifique Telecomunicaes and T Mobile

The main advantage of trading using opposite Unifique Telecomunicaes and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes 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 Unifique Telecomunicaes SA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.