Correlation Between T-Mobile and GOLD ROAD

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

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

Diversification Opportunities for T-Mobile and GOLD ROAD

0.49

Correlation Coefficient

T-Mobile  GOLD ROAD

Very weak diversification

The 3 months correlation between T-Mobile and GOLD is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of T-Mobile i.e., T-Mobile and GOLD ROAD go up and down completely randomly.

Pair Corralation between T-Mobile and GOLD ROAD

Assuming the 90 days horizon T Mobile is expected to under-perform the GOLD ROAD. But the stock apears to be less risky and, when comparing its historical volatility, T Mobile is 1.06 times less risky than GOLD ROAD. The stock trades about -0.26 of its potential returns per unit of risk. The GOLD ROAD RES is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  125.00  in GOLD ROAD RES on October 6, 2024 and sell it today you would earn a total of  0.00  from holding GOLD ROAD RES or generate 0.0% return on investment over 90 days.

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

T Mobile  vs.  GOLD ROAD RES

T Mobile

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 9 (%) 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 February 2025.

GOLD ROAD RES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T-Mobile and GOLD ROAD

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

The idea behind T Mobile and GOLD ROAD RES 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.