Correlation Between T MOBILE and US FOODS
Can any of the company-specific risk be diversified away by investing in both T MOBILE and US FOODS 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 US FOODS 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 US FOODS HOLDING, you can compare the effects of market volatilities on T MOBILE and US FOODS 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of T MOBILE and US FOODS.
Diversification Opportunities for T MOBILE and US FOODS
Almost no diversification
The 3 months correlation between TM5 and UFH is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding T MOBILE US and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of T MOBILE i.e., T MOBILE and US FOODS go up and down completely randomly.
Pair Corralation between T MOBILE and US FOODS
Assuming the 90 days trading horizon T MOBILE is expected to generate 1.32 times less return on investment than US FOODS. But when comparing it to its historical volatility, T MOBILE US is 1.28 times less risky than US FOODS. It trades about 0.1 of its potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,260 in US FOODS HOLDING on September 13, 2024 and sell it today you would earn a total of 3,440 from holding US FOODS HOLDING or generate 105.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
T MOBILE US vs. US FOODS HOLDING
Performance |
| Timeline |
| T MOBILE US |
| US FOODS HOLDING |
T MOBILE and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T MOBILE and US FOODS
The main advantage of trading using opposite T MOBILE and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T MOBILE position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.The idea behind T MOBILE US and US FOODS HOLDING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| US FOODS vs. T MOBILE US | US FOODS vs. Gamma Communications plc | US FOODS vs. AOYAMA TRADING | US FOODS vs. Tower One Wireless |
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 CEOs Directory module to screen CEOs from public companies around the world.
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