Correlation Between T-Mobile and KRISPY KREME

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

By analyzing existing cross correlation between T Mobile and KRISPY KREME DL 01, you can compare the effects of market volatilities on T-Mobile and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-Mobile and KRISPY KREME.

Diversification Opportunities for T-Mobile and KRISPY KREME

-0.53

Correlation Coefficient

T-Mobile  KRISPY KREME

Excellent diversification

The 3 months correlation between T-Mobile and KRISPY is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of T-Mobile i.e., T-Mobile and KRISPY KREME go up and down completely randomly.

Pair Corralation between T-Mobile and KRISPY KREME

Assuming the 90 days horizon T Mobile is expected to generate 0.45 times more return on investment than KRISPY KREME. However, T Mobile is 2.23 times less risky than KRISPY KREME. It trades about 0.1 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.16 per unit of risk. If you would invest  21,321  in T Mobile on December 21, 2024 and sell it today you would earn a total of  2,519  from holding T Mobile or generate 11.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

T Mobile  vs.  KRISPY KREME DL 01

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 nearly fragile basic indicators, T-Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

KRISPY KREME DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days KRISPY KREME DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with T-Mobile and KRISPY KREME

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

The idea behind T Mobile and KRISPY KREME DL 01 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.