Correlation Between T Mobile and Allianz SE

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

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

Diversification Opportunities for T Mobile and Allianz SE

0.72

Correlation Coefficient

T Mobile  Allianz SE

Poor diversification

The 3 months correlation between TM5 and Allianz is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Allianz SE VNA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE VNA 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 Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE VNA has no effect on the direction of T Mobile i.e., T Mobile and Allianz SE go up and down completely randomly.

Pair Corralation between T Mobile and Allianz SE

Assuming the 90 days horizon T Mobile is expected to generate 1.6 times less return on investment than Allianz SE. In addition to that, T Mobile is 1.86 times more volatile than Allianz SE VNA. It trades about 0.09 of its total potential returns per unit of risk. Allianz SE VNA is currently generating about 0.26 per unit of volatility. If you would invest  29,510  in Allianz SE VNA on December 24, 2024 and sell it today you would earn a total of  5,630  from holding Allianz SE VNA or generate 19.08% 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.  Allianz SE VNA

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.

Allianz SE VNA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE VNA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allianz SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Mobile and Allianz SE

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

The idea behind T Mobile and Allianz SE VNA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..