Correlation Between T Mobile and Lumen Technologies,

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

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

Diversification Opportunities for T Mobile and Lumen Technologies,

0.39

Correlation Coefficient

T Mobile  Lumen Technologies,

Weak diversification

The 3 months correlation between T1MU34 and Lumen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, 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 Lumen Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies, has no effect on the direction of T Mobile i.e., T Mobile and Lumen Technologies, go up and down completely randomly.

Pair Corralation between T Mobile and Lumen Technologies,

Assuming the 90 days trading horizon T Mobile is expected to generate 0.32 times more return on investment than Lumen Technologies,. However, T Mobile is 3.14 times less risky than Lumen Technologies,. It trades about 0.18 of its potential returns per unit of risk. Lumen Technologies, is currently generating about 0.03 per unit of risk. If you would invest  57,012  in T Mobile on October 7, 2024 and sell it today you would earn a total of  10,580  from holding T Mobile or generate 18.56% return on investment over 90 days.

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

T Mobile  vs.  Lumen Technologies,

T Mobile

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 13 (%) 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.

Lumen Technologies,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lumen Technologies, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Lumen Technologies, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with T Mobile and Lumen Technologies,

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

The idea behind T Mobile and Lumen Technologies, 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.