Correlation Between TRAVIS PERKINS and T-Mobile

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

By analyzing existing cross correlation between TRAVIS PERKINS LS 1 and T Mobile, you can compare the effects of market volatilities on TRAVIS PERKINS 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 TRAVIS PERKINS with a short position of T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVIS PERKINS and T-Mobile.

Diversification Opportunities for TRAVIS PERKINS and T-Mobile

-0.68

Correlation Coefficient

TRAVIS PERKINS  T-Mobile

Excellent diversification

The 3 months correlation between TRAVIS and T-Mobile is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding TRAVIS PERKINS LS 1 and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and TRAVIS PERKINS 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 TRAVIS PERKINS LS 1 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 TRAVIS PERKINS i.e., TRAVIS PERKINS and T-Mobile go up and down completely randomly.

Pair Corralation between TRAVIS PERKINS and T-Mobile

Assuming the 90 days trading horizon TRAVIS PERKINS LS 1 is expected to under-perform the T-Mobile. In addition to that, TRAVIS PERKINS is 1.14 times more volatile than T Mobile. It trades about -0.29 of its total potential returns per unit of risk. T Mobile is currently generating about -0.07 per unit of volatility. If you would invest  21,870  in T Mobile on October 9, 2024 and sell it today you would lose (395.00) from holding T Mobile or give up 1.81% of portfolio value over 90 days.

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

TRAVIS PERKINS LS 1  vs.  T Mobile

TRAVIS PERKINS LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRAVIS PERKINS LS 1 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

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, T-Mobile may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TRAVIS PERKINS and T-Mobile

The main advantage of trading using opposite TRAVIS PERKINS and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVIS PERKINS 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 TRAVIS PERKINS LS 1 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.