Correlation Between T Mobile and Telefnica
Can any of the company-specific risk be diversified away by investing in both T Mobile and Telefnica 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 Telefnica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and Telefnica SA, you can compare the effects of market volatilities on T Mobile and Telefnica 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 Telefnica. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Telefnica.
Diversification Opportunities for T Mobile and Telefnica
Significant diversification
The 3 months correlation between T1MU34 and Telefnica is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Telefnica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefnica SA 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 are associated (or correlated) with Telefnica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefnica SA has no effect on the direction of T Mobile i.e., T Mobile and Telefnica go up and down completely randomly.
Pair Corralation between T Mobile and Telefnica
Assuming the 90 days trading horizon T Mobile is expected to generate 0.73 times more return on investment than Telefnica. However, T Mobile is 1.37 times less risky than Telefnica. It trades about 0.2 of its potential returns per unit of risk. Telefnica SA is currently generating about -0.03 per unit of risk. If you would invest 55,012 in T Mobile on September 24, 2024 and sell it today you would earn a total of 11,921 from holding T Mobile or generate 21.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
T Mobile vs. Telefnica SA
Performance |
Timeline |
T Mobile |
Telefnica SA |
T Mobile and Telefnica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with T Mobile and Telefnica
The main advantage of trading using opposite T Mobile and Telefnica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, Telefnica 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 Telefnica will offset losses from the drop in Telefnica's long position.T Mobile vs. Bank of America | T Mobile vs. Metalrgica Riosulense SA | T Mobile vs. Multilaser Industrial SA | T Mobile vs. Deutsche Bank Aktiengesellschaft |
Telefnica vs. T Mobile | Telefnica vs. Verizon Communications | Telefnica vs. Vodafone Group Public | Telefnica vs. ATT Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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