Correlation Between Stepstone and T Mobile
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and T Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and T Mobile, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and T Mobile.
Diversification Opportunities for Stepstone and T Mobile
Almost no diversification
The 3 months correlation between Stepstone and TMUS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and T Mobile go up and down completely randomly.
Pair Corralation between Stepstone and T Mobile
Given the investment horizon of 90 days Stepstone is expected to generate 1.25 times less return on investment than T Mobile. In addition to that, Stepstone is 3.14 times more volatile than T Mobile. It trades about 0.13 of its total potential returns per unit of risk. T Mobile is currently generating about 0.49 per unit of volatility. If you would invest 22,197 in T Mobile on August 31, 2024 and sell it today you would earn a total of 2,423 from holding T Mobile or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. T Mobile
Performance |
| Timeline |
| Stepstone Group |
| T Mobile |
Stepstone and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and T Mobile
The main advantage of trading using opposite Stepstone and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| T Mobile vs. RLJ Lodging Trust | T Mobile vs. Aquagold International | T Mobile vs. Stepstone Group | T Mobile vs. Morningstar Unconstrained Allocation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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