Correlation Between T MOBILE and Centene Corp

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

Diversification Opportunities for T MOBILE and Centene Corp

-0.77

Correlation Coefficient

T MOBILE  Centene Corp

Pay attention - limited upside

The 3 months correlation between TM5 and Centene is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp 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 Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of T MOBILE i.e., T MOBILE and Centene Corp go up and down completely randomly.

Pair Corralation between T MOBILE and Centene Corp

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to under-perform the Centene Corp. In addition to that, T MOBILE is 1.28 times more volatile than Centene Corp. It trades about -0.2 of its total potential returns per unit of risk. Centene Corp is currently generating about 0.45 per unit of volatility. If you would invest  5,431  in Centene Corp on October 10, 2024 and sell it today you would earn a total of  649.00  from holding Centene Corp or generate 11.95% return on investment over 90 days.

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

T MOBILE INCDL 00001  vs.  Centene Corp

T MOBILE INCDL

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 6 (%) 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.

Centene Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centene Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Centene Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with T MOBILE and Centene Corp

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

The idea behind T MOBILE INCDL 00001 and Centene Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.