Correlation Between T-MOBILE and T-Mobile

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

Diversification Opportunities for T-MOBILE and T-Mobile

0.97

Correlation Coefficient

T-MOBILE  T-Mobile

Almost no diversification

The 3 months correlation between T-MOBILE and T-Mobile is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of T-MOBILE i.e., T-MOBILE and T-Mobile go up and down completely randomly.

Pair Corralation between T-MOBILE and T-Mobile

Assuming the 90 days trading horizon T MOBILE US is expected to generate 0.96 times more return on investment than T-Mobile. However, T MOBILE US is 1.04 times less risky than T-Mobile. It trades about -0.25 of its potential returns per unit of risk. T Mobile is currently generating about -0.26 per unit of risk. If you would invest  23,055  in T MOBILE US on October 6, 2024 and sell it today you would lose (1,780) from holding T MOBILE US or give up 7.72% of portfolio value over 90 days.

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

T MOBILE US  vs.  T Mobile

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.

T Mobile

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, T-Mobile may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with T-MOBILE and T-Mobile

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

The idea behind T MOBILE US and T Mobile 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.

Check out your portfolio center.

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.