Correlation Between T-Mobile and ATT
Can any of the company-specific risk be diversified away by investing in both T-Mobile and ATT 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 ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and ATT Inc, you can compare the effects of market volatilities on T-Mobile and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-Mobile and ATT.
Diversification Opportunities for T-Mobile and ATT
Very weak diversification
The 3 months correlation between T-Mobile and ATT is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of T-Mobile i.e., T-Mobile and ATT go up and down completely randomly.
Pair Corralation between T-Mobile and ATT
Assuming the 90 days horizon T Mobile is expected to generate 1.17 times more return on investment than ATT. However, T-Mobile is 1.17 times more volatile than ATT Inc. It trades about 0.13 of its potential returns per unit of risk. ATT Inc is currently generating about 0.15 per unit of risk. If you would invest 16,166 in T Mobile on October 19, 2024 and sell it today you would earn a total of 4,609 from holding T Mobile or generate 28.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. ATT Inc
Performance |
| Timeline |
| T Mobile |
| ATT Inc |
T-Mobile and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T-Mobile and ATT
The main advantage of trading using opposite T-Mobile and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-Mobile position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| T-Mobile vs. ONWARD MEDICAL BV | T-Mobile vs. MHP Hotel AG | T-Mobile vs. ETFS Coffee ETC | T-Mobile vs. COVIVIO HOTELS INH |
| ATT vs. Platinum Investment Management | ATT vs. Corporate Travel Management | ATT vs. AGF Management Limited | ATT vs. JAPAN TOBACCO UNSPADR12 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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