Correlation Between T MOBILE and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both T MOBILE and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T MOBILE US and Geely Automobile Holdings, you can compare the effects of market volatilities on T MOBILE and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of T MOBILE and Geely Automobile.
Diversification Opportunities for T MOBILE and Geely Automobile
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between TM5 and Geely is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 US are associated (or correlated) with Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of T MOBILE i.e., T MOBILE and Geely Automobile go up and down completely randomly.
Pair Corralation between T MOBILE and Geely Automobile
Assuming the 90 days trading horizon T MOBILE is expected to generate 1.57 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, T MOBILE US is 2.21 times less risky than Geely Automobile. It trades about 0.08 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Geely Automobile Holdings on October 27, 2024 and sell it today you would earn a total of 82.00 from holding Geely Automobile Holdings or generate 86.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T MOBILE US vs. Geely Automobile Holdings
Performance |
| Timeline |
| T MOBILE US |
| Geely Automobile Holdings |
T MOBILE and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T MOBILE and Geely Automobile
The main advantage of trading using opposite T MOBILE and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T MOBILE position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| T MOBILE vs. BANKINTER ADR 2007 | T MOBILE vs. Commonwealth Bank of | T MOBILE vs. Japan Tobacco | T MOBILE vs. British American Tobacco |
| Geely Automobile vs. Scientific Games | Geely Automobile vs. PLAYTIKA HOLDING DL 01 | Geely Automobile vs. Gaming and Leisure | Geely Automobile vs. MOVIE GAMES SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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