Correlation Between T-MOBILE and Magna International
Can any of the company-specific risk be diversified away by investing in both T-MOBILE and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on T-MOBILE and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-MOBILE and Magna International.
Diversification Opportunities for T-MOBILE and Magna International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between T-MOBILE and Magna is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of T-MOBILE i.e., T-MOBILE and Magna International go up and down completely randomly.
Pair Corralation between T-MOBILE and Magna International
Assuming the 90 days trading horizon T MOBILE US is expected to generate 1.28 times more return on investment than Magna International. However, T-MOBILE is 1.28 times more volatile than Magna International. It trades about -0.2 of its potential returns per unit of risk. Magna International is currently generating about -0.31 per unit of risk. If you would invest 22,160 in T MOBILE US on October 11, 2024 and sell it today you would lose (1,445) from holding T MOBILE US or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
T MOBILE US vs. Magna International
Performance |
| Timeline |
| T MOBILE US |
| Magna International |
T-MOBILE and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T-MOBILE and Magna International
The main advantage of trading using opposite T-MOBILE and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-MOBILE position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| T-MOBILE vs. Wayside Technology Group | T-MOBILE vs. X FAB Silicon Foundries | T-MOBILE vs. PLAYMATES TOYS | T-MOBILE vs. PLAYSTUDIOS A DL 0001 |
| Magna International vs. T MOBILE US | Magna International vs. AOYAMA TRADING | Magna International vs. FIH MOBILE | Magna International vs. Highlight Communications AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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