Correlation Between T-Mobile and VIB Vermgen

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

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

Diversification Opportunities for T-Mobile and VIB Vermgen

-0.49

Correlation Coefficient

T-Mobile  VIB Vermgen

Very good diversification

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

Pair Corralation between T-Mobile and VIB Vermgen

Assuming the 90 days horizon T Mobile is expected to generate 1.18 times more return on investment than VIB Vermgen. However, T-Mobile is 1.18 times more volatile than VIB Vermgen AG. It trades about 0.0 of its potential returns per unit of risk. VIB Vermgen AG is currently generating about -0.24 per unit of risk. If you would invest  21,429  in T Mobile on October 24, 2024 and sell it today you would lose (229.00) from holding T Mobile or give up 1.07% of portfolio value over 90 days.

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

T Mobile  vs.  VIB Vermgen AG

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.

VIB Vermgen AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIB Vermgen AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with T-Mobile and VIB Vermgen

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

The idea behind T Mobile and VIB Vermgen AG 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.