Correlation Between Loews Corp and T-MOBILE

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

By analyzing existing cross correlation between Loews Corp and T MOBILE INCDL 00001, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of T-MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and T-MOBILE.

Diversification Opportunities for Loews Corp and T-MOBILE

0.91

Correlation Coefficient

Loews Corp  T-MOBILE

Almost no diversification

The 3 months correlation between Loews and T-MOBILE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and T MOBILE INCDL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE INCDL and Loews Corp 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 Loews Corp 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 INCDL has no effect on the direction of Loews Corp i.e., Loews Corp and T-MOBILE go up and down completely randomly.

Pair Corralation between Loews Corp and T-MOBILE

Assuming the 90 days horizon Loews Corp is expected to generate 2.17 times less return on investment than T-MOBILE. In addition to that, Loews Corp is 1.16 times more volatile than T MOBILE INCDL 00001. It trades about 0.12 of its total potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about 0.31 per unit of volatility. If you would invest  18,224  in T MOBILE INCDL 00001 on September 5, 2024 and sell it today you would earn a total of  5,151  from holding T MOBILE INCDL 00001 or generate 28.26% return on investment over 90 days.

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

Loews Corp  vs.  T MOBILE INCDL 00001

Loews Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Loews Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

T MOBILE INCDL

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T-MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Loews Corp and T-MOBILE

The main advantage of trading using opposite Loews Corp and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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 Loews Corp and T MOBILE INCDL 00001 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.