Correlation Between T-MOBILE and Monument Mining

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

Diversification Opportunities for T-MOBILE and Monument Mining

0.54

Correlation Coefficient

T-MOBILE  Monument Mining

Very weak diversification

The 3 months correlation between T-MOBILE and Monument is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of T-MOBILE i.e., T-MOBILE and Monument Mining go up and down completely randomly.

Pair Corralation between T-MOBILE and Monument Mining

Assuming the 90 days trading horizon T-MOBILE is expected to generate 3.97 times less return on investment than Monument Mining. But when comparing it to its historical volatility, T MOBILE US is 2.41 times less risky than Monument Mining. It trades about 0.1 of its potential returns per unit of risk. Monument Mining Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Monument Mining Limited on December 25, 2024 and sell it today you would earn a total of  9.00  from holding Monument Mining Limited or generate 50.0% return on investment over 90 days.

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

T MOBILE US  vs.  Monument Mining Limited

T MOBILE US

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, T-MOBILE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Monument Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monument Mining Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Monument Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T-MOBILE and Monument Mining

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

The idea behind T MOBILE US and Monument Mining Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.