Correlation Between T Mobile and FingerMotion

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

By analyzing existing cross correlation between T Mobile and FingerMotion, you can compare the effects of market volatilities on T Mobile and FingerMotion 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 FingerMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and FingerMotion.

Diversification Opportunities for T Mobile and FingerMotion

-0.5

Correlation Coefficient

T Mobile  FingerMotion

Very good diversification

The 3 months correlation between TMUS and FingerMotion is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion 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 FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of T Mobile i.e., T Mobile and FingerMotion go up and down completely randomly.

Pair Corralation between T Mobile and FingerMotion

Given the investment horizon of 90 days T Mobile is expected to generate 1.13 times less return on investment than FingerMotion. But when comparing it to its historical volatility, T Mobile is 6.45 times less risky than FingerMotion. It trades about 0.11 of its potential returns per unit of risk. FingerMotion is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  339.00  in FingerMotion on September 5, 2024 and sell it today you would lose (140.00) from holding FingerMotion or give up 41.3% of portfolio value over 90 days.

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

T Mobile  vs.  FingerMotion

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. 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.

FingerMotion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FingerMotion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FingerMotion is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with T Mobile and FingerMotion

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

The idea behind T Mobile and FingerMotion 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.