Correlation Between RTL Group and T-MOBILE

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

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

Diversification Opportunities for RTL Group and T-MOBILE

0.76

Correlation Coefficient

RTL Group  T-MOBILE

Poor diversification

The 3 months correlation between RTL and T-MOBILE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and T MOBILE US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE US and RTL Group 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 RTL Group SA 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 US has no effect on the direction of RTL Group i.e., RTL Group and T-MOBILE go up and down completely randomly.

Pair Corralation between RTL Group and T-MOBILE

Assuming the 90 days trading horizon RTL Group SA is expected to generate 0.75 times more return on investment than T-MOBILE. However, RTL Group SA is 1.33 times less risky than T-MOBILE. It trades about 0.32 of its potential returns per unit of risk. T MOBILE US is currently generating about 0.1 per unit of risk. If you would invest  2,645  in RTL Group SA on December 23, 2024 and sell it today you would earn a total of  880.00  from holding RTL Group SA or generate 33.27% return on investment over 90 days.

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

RTL Group SA  vs.  T MOBILE US

RTL Group SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RTL Group SA are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, RTL Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

T MOBILE US

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T-MOBILE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with RTL Group and T-MOBILE

The main advantage of trading using opposite RTL Group and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group 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 RTL Group SA and T MOBILE US 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .