Correlation Between IDT and T Mobile

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

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

Diversification Opportunities for IDT and T Mobile

0.57

Correlation Coefficient

IDT  T Mobile

Very weak diversification

The 3 months correlation between IDT and TMUS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding IDT Corp. and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and IDT 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 IDT Corporation 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 IDT i.e., IDT and T Mobile go up and down completely randomly.

Pair Corralation between IDT and T Mobile

Considering the 90-day investment horizon IDT is expected to generate 1.82 times less return on investment than T Mobile. In addition to that, IDT is 1.15 times more volatile than T Mobile. It trades about 0.08 of its total potential returns per unit of risk. T Mobile is currently generating about 0.17 per unit of volatility. If you would invest  22,293  in T Mobile on December 26, 2024 and sell it today you would earn a total of  3,941  from holding T Mobile or generate 17.68% return on investment over 90 days.

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

IDT Corp.  vs.  T Mobile

IDT Corporation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IDT Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, IDT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

T Mobile

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 13 (%) 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 IDT and T Mobile

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