Correlation Between NVIDIA and T Mobile

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

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

Diversification Opportunities for NVIDIA and T Mobile

-0.59

Correlation Coefficient

NVIDIA  T Mobile

Excellent diversification

The 3 months correlation between NVIDIA and TMUS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and T Mobile go up and down completely randomly.

Pair Corralation between NVIDIA and T Mobile

Given the investment horizon of 90 days NVIDIA is expected to under-perform the T Mobile. In addition to that, NVIDIA is 2.46 times more volatile than T Mobile. It trades about -0.05 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  22,228  in T Mobile on December 27, 2024 and sell it today you would earn a total of  4,023  from holding T Mobile or generate 18.1% return on investment over 90 days.

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

NVIDIA  vs.  T Mobile

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 NVIDIA and T Mobile

The main advantage of trading using opposite NVIDIA and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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 NVIDIA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.