Correlation Between T Mobile and Fortune Brands

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

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

Diversification Opportunities for T Mobile and Fortune Brands

0.0

Correlation Coefficient

T Mobile  Fortune Brands

Pay attention - limited upside

The 3 months correlation between TM5 and Fortune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of T Mobile i.e., T Mobile and Fortune Brands go up and down completely randomly.

Pair Corralation between T Mobile and Fortune Brands

If you would invest  21,321  in T Mobile on December 22, 2024 and sell it today you would earn a total of  2,179  from holding T Mobile or generate 10.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

T Mobile  vs.  Fortune Brands Home

T Mobile

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, T Mobile may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fortune Brands Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortune Brands Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Fortune Brands is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T Mobile and Fortune Brands

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

The idea behind T Mobile and Fortune Brands Home 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 CEOs Directory module to screen CEOs from public companies around the world.