Correlation Between T Mobile and Air Products
Can any of the company-specific risk be diversified away by investing in both T Mobile and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and Air Products and, you can compare the effects of market volatilities on T Mobile and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Air Products.
Diversification Opportunities for T Mobile and Air Products
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between T1MU34 and Air is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of T Mobile i.e., T Mobile and Air Products go up and down completely randomly.
Pair Corralation between T Mobile and Air Products
Assuming the 90 days trading horizon T Mobile is expected to generate 1.26 times more return on investment than Air Products. However, T Mobile is 1.26 times more volatile than Air Products and. It trades about -0.16 of its potential returns per unit of risk. Air Products and is currently generating about -0.23 per unit of risk. If you would invest 69,493 in T Mobile on October 17, 2024 and sell it today you would lose (4,693) from holding T Mobile or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. Air Products and
Performance |
| Timeline |
| T Mobile |
| Air Products |
T Mobile and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Mobile and Air Products
The main advantage of trading using opposite T Mobile and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| T Mobile vs. Unity Software | T Mobile vs. Omega Healthcare Investors, | T Mobile vs. Healthpeak Properties | T Mobile vs. Westinghouse Air Brake |
| Air Products vs. Clover Health Investments, | Air Products vs. MAHLE Metal Leve | Air Products vs. JB Hunt Transport | Air Products vs. Zoom Video Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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