Correlation Between T-Mobile and Identiv

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

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

Diversification Opportunities for T-Mobile and Identiv

0.62

Correlation Coefficient

T-Mobile  Identiv

Poor diversification

The 3 months correlation between T-Mobile and Identiv is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of T-Mobile i.e., T-Mobile and Identiv go up and down completely randomly.

Pair Corralation between T-Mobile and Identiv

Assuming the 90 days horizon T Mobile is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, T Mobile is 2.07 times less risky than Identiv. The stock trades about -0.02 of its potential returns per unit of risk. The Identiv is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  350.00  in Identiv on October 24, 2024 and sell it today you would earn a total of  6.00  from holding Identiv or generate 1.71% 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.  Identiv

T Mobile

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days T Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, T-Mobile is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Identiv

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Identiv may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with T-Mobile and Identiv

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

The idea behind T Mobile and Identiv 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.