Correlation Between First Quantum and T-MOBILE

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

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

Diversification Opportunities for First Quantum and T-MOBILE

0.43

Correlation Coefficient

First Quantum  T-MOBILE

Very weak diversification

The 3 months correlation between First and T-MOBILE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals 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 First Quantum 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 First Quantum Minerals 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 First Quantum i.e., First Quantum and T-MOBILE go up and down completely randomly.

Pair Corralation between First Quantum and T-MOBILE

Assuming the 90 days horizon First Quantum Minerals is expected to under-perform the T-MOBILE. In addition to that, First Quantum is 3.14 times more volatile than T MOBILE INCDL 00001. It trades about 0.0 of its total potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about 0.08 per unit of volatility. If you would invest  13,507  in T MOBILE INCDL 00001 on October 4, 2024 and sell it today you would earn a total of  7,743  from holding T MOBILE INCDL 00001 or generate 57.33% return on investment over 90 days.

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

First Quantum Minerals  vs.  T MOBILE INCDL 00001

First Quantum Minerals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, First Quantum is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the 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 First Quantum and T-MOBILE

The main advantage of trading using opposite First Quantum and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Quantum 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 First Quantum Minerals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.