Correlation Between IHS Holding and T Mobile

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

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

Diversification Opportunities for IHS Holding and T Mobile

0.58

Correlation Coefficient

IHS Holding  T Mobile

Very weak diversification

The 3 months correlation between IHS and TMUS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding IHS Holding and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and IHS Holding 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 IHS Holding 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 IHS Holding i.e., IHS Holding and T Mobile go up and down completely randomly.

Pair Corralation between IHS Holding and T Mobile

Considering the 90-day investment horizon IHS Holding is expected to generate 2.27 times more return on investment than T Mobile. However, IHS Holding is 2.27 times more volatile than T Mobile. It trades about 0.27 of its potential returns per unit of risk. T Mobile is currently generating about 0.15 per unit of risk. If you would invest  297.00  in IHS Holding on December 26, 2024 and sell it today you would earn a total of  238.00  from holding IHS Holding or generate 80.13% return on investment over 90 days.

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

IHS Holding  vs.  T Mobile

IHS Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IHS Holding are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical indicators, IHS Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

T Mobile

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile 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 IHS Holding and T Mobile

The main advantage of trading using opposite IHS Holding and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHS Holding 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 IHS Holding 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.