Correlation Between T MOBILE and CBRE Group

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

Diversification Opportunities for T MOBILE and CBRE Group

0.95

Correlation Coefficient

T MOBILE  CBRE Group

Almost no diversification

The 3 months correlation between TM5 and CBRE is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class 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 CBRE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE Group Class has no effect on the direction of T MOBILE i.e., T MOBILE and CBRE Group go up and down completely randomly.

Pair Corralation between T MOBILE and CBRE Group

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to generate 0.61 times more return on investment than CBRE Group. However, T MOBILE INCDL 00001 is 1.64 times less risky than CBRE Group. It trades about 0.26 of its potential returns per unit of risk. CBRE Group Class is currently generating about 0.16 per unit of risk. If you would invest  18,117  in T MOBILE INCDL 00001 on September 12, 2024 and sell it today you would earn a total of  4,213  from holding T MOBILE INCDL 00001 or generate 23.25% return on investment over 90 days.

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

T MOBILE INCDL 00001  vs.  CBRE Group Class

T MOBILE INCDL

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 20 (%) 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.

CBRE Group Class

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CBRE Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T MOBILE and CBRE Group

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

The idea behind T MOBILE INCDL 00001 and CBRE Group Class 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.