Correlation Between Centene Corp and T-MOBILE

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

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

Diversification Opportunities for Centene Corp and T-MOBILE

-0.62

Correlation Coefficient

Centene Corp  T-MOBILE

Excellent diversification

The 3 months correlation between Centene and T-MOBILE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp 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 Centene Corp 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 Centene Corp 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 Centene Corp i.e., Centene Corp and T-MOBILE go up and down completely randomly.

Pair Corralation between Centene Corp and T-MOBILE

Assuming the 90 days horizon Centene Corp is expected to under-perform the T-MOBILE. But the stock apears to be less risky and, when comparing its historical volatility, Centene Corp is 1.35 times less risky than T-MOBILE. The stock trades about -0.05 of its potential returns per unit of risk. The T MOBILE INCDL 00001 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  21,172  in T MOBILE INCDL 00001 on December 21, 2024 and sell it today you would earn a total of  2,498  from holding T MOBILE INCDL 00001 or generate 11.8% return on investment over 90 days.

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

Centene Corp  vs.  T MOBILE INCDL 00001

Centene Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Centene Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Centene Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

T MOBILE INCDL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, T-MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centene Corp and T-MOBILE

The main advantage of trading using opposite Centene Corp and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp 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 Centene Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.