Correlation Between T-MOBILE and MAVEN WIRELESS

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

Diversification Opportunities for T-MOBILE and MAVEN WIRELESS

-0.62

Correlation Coefficient

T-MOBILE  MAVEN WIRELESS

Excellent diversification

The 3 months correlation between T-MOBILE and MAVEN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE INCDL 00001 and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of T-MOBILE i.e., T-MOBILE and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between T-MOBILE and MAVEN WIRELESS

Assuming the 90 days trading horizon T MOBILE INCDL 00001 is expected to generate 0.5 times more return on investment than MAVEN WIRELESS. However, T MOBILE INCDL 00001 is 2.0 times less risky than MAVEN WIRELESS. It trades about 0.32 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.1 per unit of risk. If you would invest  18,081  in T MOBILE INCDL 00001 on September 3, 2024 and sell it today you would earn a total of  5,254  from holding T MOBILE INCDL 00001 or generate 29.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

T MOBILE INCDL 00001  vs.  MAVEN WIRELESS SWEDEN

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.

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.

Pair Trading with T-MOBILE and MAVEN WIRELESS

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

The idea behind T MOBILE INCDL 00001 and MAVEN WIRELESS SWEDEN 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.