Correlation Between MAVEN WIRELESS and T-Mobile

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

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

Diversification Opportunities for MAVEN WIRELESS and T-Mobile

-0.62

Correlation Coefficient

MAVEN WIRELESS  T-Mobile

Excellent diversification

The 3 months correlation between MAVEN and T-Mobile is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN 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 has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and T-Mobile go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and T-Mobile

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to under-perform the T-Mobile. In addition to that, MAVEN WIRELESS is 1.7 times more volatile than T Mobile. It trades about -0.1 of its total potential returns per unit of risk. T Mobile is currently generating about 0.27 per unit of volatility. If you would invest  17,960  in T Mobile on September 4, 2024 and sell it today you would earn a total of  5,250  from holding T Mobile or generate 29.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  T Mobile

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

T Mobile

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, T-Mobile reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAVEN WIRELESS and T-Mobile

The main advantage of trading using opposite MAVEN WIRELESS and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN and T Mobile 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 Transaction History module to view history of all your transactions and understand their impact on performance.