Correlation Between Marubeni and T-Mobile

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

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

Diversification Opportunities for Marubeni and T-Mobile

-0.39

Correlation Coefficient

Marubeni  T-Mobile

Very good diversification

The 3 months correlation between Marubeni and T-Mobile is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Marubeni 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 Marubeni 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 Marubeni i.e., Marubeni and T-Mobile go up and down completely randomly.

Pair Corralation between Marubeni and T-Mobile

Assuming the 90 days trading horizon Marubeni is expected to generate 0.96 times more return on investment than T-Mobile. However, Marubeni is 1.04 times less risky than T-Mobile. It trades about -0.12 of its potential returns per unit of risk. T Mobile is currently generating about -0.24 per unit of risk. If you would invest  1,433  in Marubeni on October 12, 2024 and sell it today you would lose (58.00) from holding Marubeni or give up 4.05% of portfolio value over 90 days.

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

Marubeni  vs.  T Mobile

Marubeni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marubeni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

T Mobile

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, T-Mobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marubeni and T-Mobile

The main advantage of trading using opposite Marubeni and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni 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 Marubeni 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..