Correlation Between Hartford Financial and T Mobile

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

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

Diversification Opportunities for Hartford Financial and T Mobile

0.5

Correlation Coefficient

Hartford Financial  T Mobile

Very weak diversification

The 3 months correlation between Hartford and T1MU34 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Financial and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Hartford Financial 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 The Hartford Financial 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 Hartford Financial i.e., Hartford Financial and T Mobile go up and down completely randomly.

Pair Corralation between Hartford Financial and T Mobile

Assuming the 90 days trading horizon Hartford Financial is expected to generate 21.88 times less return on investment than T Mobile. But when comparing it to its historical volatility, The Hartford Financial is 41.48 times less risky than T Mobile. It trades about 0.13 of its potential returns per unit of risk. T Mobile is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Hartford Financial  vs.  T Mobile

The Hartford Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Hartford Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 Hartford Financial and T Mobile

The main advantage of trading using opposite Hartford Financial and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Financial 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 The Hartford Financial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.