Correlation Between Canadian Utilities and T-Mobile
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and T Mobile, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and T-Mobile.
Diversification Opportunities for Canadian Utilities and T-Mobile
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and T-Mobile is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Canadian Utilities 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 Canadian Utilities Limited 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 Canadian Utilities i.e., Canadian Utilities and T-Mobile go up and down completely randomly.
Pair Corralation between Canadian Utilities and T-Mobile
Assuming the 90 days horizon Canadian Utilities is expected to generate 2.52 times less return on investment than T-Mobile. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.09 times less risky than T-Mobile. It trades about 0.18 of its potential returns per unit of risk. T Mobile is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 20,652 in T Mobile on September 1, 2024 and sell it today you would earn a total of 2,898 from holding T Mobile or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. T Mobile
Performance |
| Timeline |
| Canadian Utilities |
| T Mobile |
Canadian Utilities and T-Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and T-Mobile
The main advantage of trading using opposite Canadian Utilities and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. ATRESMEDIA | Canadian Utilities vs. Lamar Advertising | Canadian Utilities vs. CARSALESCOM | Canadian Utilities vs. PLAYTIKA HOLDING DL 01 |
| T-Mobile vs. BURLINGTON STORES | T-Mobile vs. Sunstone Hotel Investors | T-Mobile vs. Playa Hotels Resorts | T-Mobile vs. MARKET VECTR RETAIL |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |