Correlation Between Teladoc Health and T Mobile

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

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

Diversification Opportunities for Teladoc Health and T Mobile

0.87

Correlation Coefficient

Teladoc Health  T Mobile

Very poor diversification

The 3 months correlation between Teladoc and T1MU34 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Teladoc Health 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 Teladoc Health 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 Teladoc Health i.e., Teladoc Health and T Mobile go up and down completely randomly.

Pair Corralation between Teladoc Health and T Mobile

Assuming the 90 days trading horizon Teladoc Health is expected to under-perform the T Mobile. In addition to that, Teladoc Health is 3.44 times more volatile than T Mobile. It trades about -0.02 of its total potential returns per unit of risk. T Mobile is currently generating about 0.19 per unit of volatility. If you would invest  33,560  in T Mobile on September 28, 2024 and sell it today you would earn a total of  35,574  from holding T Mobile or generate 106.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.63%
Values	Daily Returns

Teladoc Health  vs.  T Mobile

Teladoc Health

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

T Mobile

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 17 (%) 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.

Pair Trading with Teladoc Health and T Mobile

The main advantage of trading using opposite Teladoc Health and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health 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 Teladoc Health 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.