Correlation Between T Mobile and Unifique Telecomunicaes

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

By analyzing existing cross correlation between T Mobile and Unifique Telecomunicaes SA, you can compare the effects of market volatilities on T Mobile and Unifique Telecomunicaes 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 Unifique Telecomunicaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Unifique Telecomunicaes.

Diversification Opportunities for T Mobile and Unifique Telecomunicaes

0.65

Correlation Coefficient

T Mobile  Unifique Telecomunicaes

Poor diversification

The 3 months correlation between T1MU34 and Unifique is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Unifique Telecomunicaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifique Telecomunicaes 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 Unifique Telecomunicaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifique Telecomunicaes has no effect on the direction of T Mobile i.e., T Mobile and Unifique Telecomunicaes go up and down completely randomly.

Pair Corralation between T Mobile and Unifique Telecomunicaes

Assuming the 90 days trading horizon T Mobile is expected to generate 1.25 times more return on investment than Unifique Telecomunicaes. However, T Mobile is 1.25 times more volatile than Unifique Telecomunicaes SA. It trades about 0.1 of its potential returns per unit of risk. Unifique Telecomunicaes SA is currently generating about 0.11 per unit of risk. If you would invest  68,102  in T Mobile on December 30, 2024 and sell it today you would earn a total of  8,497  from holding T Mobile or generate 12.48% return on investment over 90 days.

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

T Mobile  vs.  Unifique Telecomunicaes SA

T Mobile

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 7 (%) 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.

Unifique Telecomunicaes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unifique Telecomunicaes SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Unifique Telecomunicaes may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with T Mobile and Unifique Telecomunicaes

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

The idea behind T Mobile and Unifique Telecomunicaes SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.