Correlation Between SOCKET MOBILE and T-MOBILE

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

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

Diversification Opportunities for SOCKET MOBILE and T-MOBILE

0.71

Correlation Coefficient

SOCKET MOBILE  T-MOBILE

Poor diversification

The 3 months correlation between SOCKET and T-MOBILE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW 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 SOCKET MOBILE 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 SOCKET MOBILE NEW 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 SOCKET MOBILE i.e., SOCKET MOBILE and T-MOBILE go up and down completely randomly.

Pair Corralation between SOCKET MOBILE and T-MOBILE

Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to under-perform the T-MOBILE. In addition to that, SOCKET MOBILE is 2.65 times more volatile than T MOBILE US. It trades about -0.01 of its total potential returns per unit of risk. T MOBILE US is currently generating about 0.08 per unit of volatility. If you would invest  13,109  in T MOBILE US on October 10, 2024 and sell it today you would earn a total of  7,501  from holding T MOBILE US or generate 57.22% return on investment over 90 days.

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

SOCKET MOBILE NEW  vs.  T MOBILE US

SOCKET MOBILE NEW

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOCKET MOBILE NEW are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, SOCKET MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

T MOBILE US

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively 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 SOCKET MOBILE and T-MOBILE

The main advantage of trading using opposite SOCKET MOBILE and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE 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 SOCKET MOBILE NEW 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.