Correlation Between T MOBILE and GEELY AUTOMOBILE

Can any of the company-specific risk be diversified away by investing in both T MOBILE and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T MOBILE INCDL 00001 and GEELY AUTOMOBILE, you can compare the effects of market volatilities on T MOBILE and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of T MOBILE and GEELY AUTOMOBILE.

Diversification Opportunities for T MOBILE and GEELY AUTOMOBILE

-0.03

Correlation Coefficient

T MOBILE  GEELY AUTOMOBILE

Good diversification

The 3 months correlation between TM5 and GEELY is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 INCDL 00001 are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of T MOBILE i.e., T MOBILE and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between T MOBILE and GEELY AUTOMOBILE

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to generate 0.61 times more return on investment than GEELY AUTOMOBILE. However, T MOBILE INCDL 00001 is 1.63 times less risky than GEELY AUTOMOBILE. It trades about 0.0 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.0 per unit of risk. If you would invest  21,000  in T MOBILE INCDL 00001 on October 26, 2024 and sell it today you would lose (65.00) from holding T MOBILE INCDL 00001 or give up 0.31% of portfolio value over 90 days.

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

T MOBILE INCDL 00001  vs.  GEELY AUTOMOBILE

T MOBILE INCDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T MOBILE INCDL 00001 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, T MOBILE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GEELY AUTOMOBILE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEELY AUTOMOBILE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GEELY AUTOMOBILE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T MOBILE and GEELY AUTOMOBILE

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

The idea behind T MOBILE INCDL 00001 and GEELY AUTOMOBILE 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.