Correlation Between T-MOBILE and American Public

Can any of the company-specific risk be diversified away by investing in both T-MOBILE and American Public 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 American Public 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 American Public Education, you can compare the effects of market volatilities on T-MOBILE and American Public 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 American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-MOBILE and American Public.

Diversification Opportunities for T-MOBILE and American Public

0.77

Correlation Coefficient

T-MOBILE  American Public

Poor diversification

The 3 months correlation between T-MOBILE and American is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of T-MOBILE i.e., T-MOBILE and American Public go up and down completely randomly.

Pair Corralation between T-MOBILE and American Public

Assuming the 90 days trading horizon T MOBILE US is expected to under-perform the American Public. But the stock apears to be less risky and, when comparing its historical volatility, T MOBILE US is 1.34 times less risky than American Public. The stock trades about -0.28 of its potential returns per unit of risk. The American Public Education is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,960  in American Public Education on October 3, 2024 and sell it today you would earn a total of  100.00  from holding American Public Education or generate 5.1% return on investment over 90 days.

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

T MOBILE US  vs.  American Public Education

T MOBILE US

Risk-Adjusted Performance

10 of 100

OK

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

American Public Education

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Public Education are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, American Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T-MOBILE and American Public

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

The idea behind T MOBILE US and American Public Education 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.