Correlation Between T-MOBILE and Mühlbauer Holding

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

Diversification Opportunities for T-MOBILE and Mühlbauer Holding

-0.68

Correlation Coefficient

T-MOBILE  Mühlbauer Holding

Excellent diversification

The 3 months correlation between T-MOBILE and Mühlbauer is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mühlbauer Holding 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 Mühlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mühlbauer Holding has no effect on the direction of T-MOBILE i.e., T-MOBILE and Mühlbauer Holding go up and down completely randomly.

Pair Corralation between T-MOBILE and Mühlbauer Holding

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to generate 0.83 times more return on investment than Mühlbauer Holding. However, T MOBILE INCDL 00001 is 1.2 times less risky than Mühlbauer Holding. It trades about 0.0 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.01 per unit of risk. If you would invest  21,224  in T MOBILE INCDL 00001 on October 24, 2024 and sell it today you would lose (164.00) from holding T MOBILE INCDL 00001 or give up 0.77% of portfolio value over 90 days.

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

T MOBILE INCDL 00001  vs.  Mhlbauer Holding AG

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.

Mühlbauer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mhlbauer Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Mühlbauer Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T-MOBILE and Mühlbauer Holding

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

The idea behind T MOBILE INCDL 00001 and Mhlbauer Holding AG 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.