Correlation Between T-MOBILE and Lendlease

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

Diversification Opportunities for T-MOBILE and Lendlease

-0.15

Correlation Coefficient

T-MOBILE  Lendlease

Good diversification

The 3 months correlation between T-MOBILE and Lendlease is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of T-MOBILE i.e., T-MOBILE and Lendlease go up and down completely randomly.

Pair Corralation between T-MOBILE and Lendlease

Assuming the 90 days trading horizon T MOBILE US is expected to generate 0.99 times more return on investment than Lendlease. However, T MOBILE US is 1.01 times less risky than Lendlease. It trades about 0.13 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.15 per unit of risk. If you would invest  18,898  in T MOBILE US on October 6, 2024 and sell it today you would earn a total of  2,377  from holding T MOBILE US or generate 12.58% return on investment over 90 days.

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

T MOBILE US  vs.  Lendlease Group

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 fragile basic indicators, T-MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lendlease Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendlease Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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 Lendlease

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

The idea behind T MOBILE US and Lendlease Group 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.