Correlation Between Vestas Wind and T-MOBILE

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

By analyzing existing cross correlation between Vestas Wind Systems and T MOBILE US, you can compare the effects of market volatilities on Vestas Wind 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 Vestas Wind with a short position of T-MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and T-MOBILE.

Diversification Opportunities for Vestas Wind and T-MOBILE

-0.32

Correlation Coefficient

Vestas Wind  T-MOBILE

Very good diversification

The 3 months correlation between Vestas and T-MOBILE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and T MOBILE US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE US and Vestas Wind 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 Vestas Wind Systems 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 US has no effect on the direction of Vestas Wind i.e., Vestas Wind and T-MOBILE go up and down completely randomly.

Pair Corralation between Vestas Wind and T-MOBILE

If you would invest  13,036  in T MOBILE US on October 11, 2024 and sell it today you would earn a total of  8,059  from holding T MOBILE US or generate 61.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vestas Wind Systems  vs.  T MOBILE US

Vestas Wind Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vestas Wind Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

T MOBILE US

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively 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 Vestas Wind and T-MOBILE

The main advantage of trading using opposite Vestas Wind and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind 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 Vestas Wind Systems and T MOBILE US 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.