Correlation Between T-MOBILE and Trade Desk
Can any of the company-specific risk be diversified away by investing in both T-MOBILE and Trade Desk 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 Trade Desk 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 The Trade Desk, you can compare the effects of market volatilities on T-MOBILE and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-MOBILE and Trade Desk.
Diversification Opportunities for T-MOBILE and Trade Desk
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between T-MOBILE and Trade is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of T-MOBILE i.e., T-MOBILE and Trade Desk go up and down completely randomly.
Pair Corralation between T-MOBILE and Trade Desk
Assuming the 90 days trading horizon T MOBILE US is expected to generate 1.01 times more return on investment than Trade Desk. However, T-MOBILE is 1.01 times more volatile than The Trade Desk. It trades about -0.14 of its potential returns per unit of risk. The Trade Desk is currently generating about -0.31 per unit of risk. If you would invest 21,800 in T MOBILE US on October 17, 2024 and sell it today you would lose (1,070) from holding T MOBILE US or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
T MOBILE US vs. The Trade Desk
Performance |
| Timeline |
| T MOBILE US |
| Trade Desk |
T-MOBILE and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T-MOBILE and Trade Desk
The main advantage of trading using opposite T-MOBILE and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-MOBILE position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| T-MOBILE vs. Air Transport Services | T-MOBILE vs. Calibre Mining Corp | T-MOBILE vs. EVS Broadcast Equipment | T-MOBILE vs. Broadcom |
| Trade Desk vs. T MOBILE US | Trade Desk vs. SOUTHWEST AIRLINES | Trade Desk vs. Ribbon Communications | Trade Desk vs. Singapore Telecommunications Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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