Correlation Between Intouch Holdings and T Mobile

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

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

Diversification Opportunities for Intouch Holdings and T Mobile

-0.25

Correlation Coefficient

Intouch Holdings  T Mobile

Very good diversification

The 3 months correlation between Intouch and TM5 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings Public and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Intouch Holdings 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 Intouch Holdings Public 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 Intouch Holdings i.e., Intouch Holdings and T Mobile go up and down completely randomly.

Pair Corralation between Intouch Holdings and T Mobile

Assuming the 90 days trading horizon Intouch Holdings Public is expected to under-perform the T Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Intouch Holdings Public is 1.16 times less risky than T Mobile. The stock trades about -0.09 of its potential returns per unit of risk. The T Mobile is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  21,416  in T Mobile on December 28, 2024 and sell it today you would earn a total of  3,069  from holding T Mobile or generate 14.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Intouch Holdings Public  vs.  T Mobile

Intouch Holdings Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intouch Holdings Public 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

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, T Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intouch Holdings and T Mobile

The main advantage of trading using opposite Intouch Holdings and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intouch Holdings 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 Intouch Holdings Public 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.