Correlation Between T-Mobile and CONSOL Energy
Can any of the company-specific risk be diversified away by investing in both T-Mobile and CONSOL Energy 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 CONSOL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and CONSOL Energy, you can compare the effects of market volatilities on T-Mobile and CONSOL Energy 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 CONSOL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-Mobile and CONSOL Energy.
Diversification Opportunities for T-Mobile and CONSOL Energy
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between T-Mobile and CONSOL is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and CONSOL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOL Energy 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 CONSOL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOL Energy has no effect on the direction of T-Mobile i.e., T-Mobile and CONSOL Energy go up and down completely randomly.
Pair Corralation between T-Mobile and CONSOL Energy
Assuming the 90 days horizon T Mobile is expected to generate 0.59 times more return on investment than CONSOL Energy. However, T Mobile is 1.7 times less risky than CONSOL Energy. It trades about 0.19 of its potential returns per unit of risk. CONSOL Energy is currently generating about 0.11 per unit of risk. If you would invest 16,382 in T Mobile on September 3, 2024 and sell it today you would earn a total of 6,828 from holding T Mobile or generate 41.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. CONSOL Energy
Performance |
| Timeline |
| T Mobile |
| CONSOL Energy |
T-Mobile and CONSOL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T-Mobile and CONSOL Energy
The main advantage of trading using opposite T-Mobile and CONSOL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-Mobile position performs unexpectedly, CONSOL Energy 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 CONSOL Energy will offset losses from the drop in CONSOL Energy's long position.| T-Mobile vs. Sims Metal Management | T-Mobile vs. Virtus Investment Partners | T-Mobile vs. CeoTronics AG | T-Mobile vs. PennantPark Investment |
| CONSOL Energy vs. DiamondRock Hospitality | CONSOL Energy vs. SHIP HEALTHCARE HLDGINC | CONSOL Energy vs. EHEALTH | CONSOL Energy vs. Sunny Optical Technology |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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