Correlation Between T-MOBILE and China International

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

Diversification Opportunities for T-MOBILE and China International

-0.33

Correlation Coefficient

T-MOBILE  China International

Very good diversification

The 3 months correlation between T-MOBILE and China is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of T-MOBILE i.e., T-MOBILE and China International go up and down completely randomly.

Pair Corralation between T-MOBILE and China International

Assuming the 90 days trading horizon T MOBILE US is expected to generate 0.4 times more return on investment than China International. However, T MOBILE US is 2.52 times less risky than China International. It trades about -0.11 of its potential returns per unit of risk. China International Marine is currently generating about -0.16 per unit of risk. If you would invest  21,825  in T MOBILE US on October 8, 2024 and sell it today you would lose (550.00) from holding T MOBILE US or give up 2.52% of portfolio value over 90 days.

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

T MOBILE US  vs.  China International Marine

T MOBILE US

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T-MOBILE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

China International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China International Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with T-MOBILE and China International

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

The idea behind T MOBILE US and China International Marine 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..