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
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loews and TM5 is 0.93. 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 1.37 times less return on investment than T MOBILE. But when comparing it to its historical volatility, Loews Corp is 1.07 times less risky than T MOBILE. It trades about 0.07 of its potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12,886 in T MOBILE INCDL 00001 on September 13, 2024 and sell it today you would earn a total of 9,609 from holding T MOBILE INCDL 00001 or generate 74.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.42% |
| Values | Daily Returns |
Loews Corp vs. T MOBILE INCDL 00001
Performance |
| Timeline |
| Loews Corp |
| T MOBILE INCDL |
Loews Corp and T MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
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.| Loews Corp vs. New Residential Investment | Loews Corp vs. AOYAMA TRADING | Loews Corp vs. SLR Investment Corp | Loews Corp vs. Electronic Arts |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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