Correlation Between Hisense Home and T-MOBILE

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

By analyzing existing cross correlation between Hisense Home Appliances and T MOBILE INCDL 00001, you can compare the effects of market volatilities on Hisense Home 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 Hisense Home with a short position of T-MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and T-MOBILE.

Diversification Opportunities for Hisense Home and T-MOBILE

-0.73

Correlation Coefficient

Hisense Home  T-MOBILE

Pay attention - limited upside

The 3 months correlation between Hisense and T-MOBILE is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and T MOBILE INCDL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE INCDL and Hisense Home 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 Hisense Home Appliances 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 INCDL has no effect on the direction of Hisense Home i.e., Hisense Home and T-MOBILE go up and down completely randomly.

Pair Corralation between Hisense Home and T-MOBILE

Assuming the 90 days horizon Hisense Home Appliances is expected to generate 3.16 times more return on investment than T-MOBILE. However, Hisense Home is 3.16 times more volatile than T MOBILE INCDL 00001. It trades about 0.09 of its potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about 0.08 per unit of risk. If you would invest  63.00  in Hisense Home Appliances on October 4, 2024 and sell it today you would earn a total of  238.00  from holding Hisense Home Appliances or generate 377.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.41%
Values	Daily Returns

Hisense Home Appliances  vs.  T MOBILE INCDL 00001

Hisense Home Appliances

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hisense Home Appliances has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

T MOBILE INCDL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 12 (%) 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 Hisense Home and T-MOBILE

The main advantage of trading using opposite Hisense Home and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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 Hisense Home Appliances and T MOBILE INCDL 00001 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .