Correlation Between T MOBILE and CHINA VANKE

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

By analyzing existing cross correlation between T MOBILE US and CHINA VANKE TD, you can compare the effects of market volatilities on T MOBILE and CHINA VANKE 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 CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of T MOBILE and CHINA VANKE.

Diversification Opportunities for T MOBILE and CHINA VANKE

0.17

Correlation Coefficient

T MOBILE  CHINA VANKE

Average diversification

The 3 months correlation between TM5 and CHINA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD 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 US are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of T MOBILE i.e., T MOBILE and CHINA VANKE go up and down completely randomly.

Pair Corralation between T MOBILE and CHINA VANKE

Assuming the 90 days trading horizon T MOBILE US is expected to generate 0.4 times more return on investment than CHINA VANKE. However, T MOBILE US is 2.49 times less risky than CHINA VANKE. It trades about 0.02 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about -0.08 per unit of risk. If you would invest  20,886  in T MOBILE US on October 25, 2024 and sell it today you would earn a total of  204.00  from holding T MOBILE US or generate 0.98% return on investment over 90 days.

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

T MOBILE US  vs.  CHINA VANKE TD

T MOBILE US

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, T MOBILE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CHINA VANKE TD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA VANKE TD 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with T MOBILE and CHINA VANKE

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

The idea behind T MOBILE US and CHINA VANKE TD 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.