Correlation Between T Mobile and Companhia Siderrgica

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

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

Diversification Opportunities for T Mobile and Companhia Siderrgica

-0.46

Correlation Coefficient

T Mobile  Companhia Siderrgica

Very good diversification

The 3 months correlation between T1MU34 and Companhia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Companhia Siderrgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderrgica and T 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 T Mobile are associated (or correlated) with Companhia Siderrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderrgica has no effect on the direction of T Mobile i.e., T Mobile and Companhia Siderrgica go up and down completely randomly.

Pair Corralation between T Mobile and Companhia Siderrgica

Assuming the 90 days trading horizon T Mobile is expected to generate 0.69 times more return on investment than Companhia Siderrgica. However, T Mobile is 1.46 times less risky than Companhia Siderrgica. It trades about -0.07 of its potential returns per unit of risk. Companhia Siderrgica Nacional is currently generating about -0.68 per unit of risk. If you would invest  69,394  in T Mobile on October 8, 2024 and sell it today you would lose (1,802) from holding T Mobile or give up 2.6% of portfolio value over 90 days.

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

T Mobile  vs.  Companhia Siderrgica Nacional

T Mobile

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, T Mobile sustained solid returns over the last few months and may actually be approaching a breakup point.

Companhia Siderrgica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Companhia Siderrgica Nacional has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with T Mobile and Companhia Siderrgica

The main advantage of trading using opposite T Mobile and Companhia Siderrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, Companhia Siderrgica 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 Companhia Siderrgica will offset losses from the drop in Companhia Siderrgica's long position.

The idea behind T Mobile and Companhia Siderrgica Nacional 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.