Correlation Between T Mobile and Cable One
Can any of the company-specific risk be diversified away by investing in both T Mobile and Cable One 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 Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and Cable One, you can compare the effects of market volatilities on T Mobile and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Cable One.
Diversification Opportunities for T Mobile and Cable One
Poor diversification
The 3 months correlation between TMUS and Cable is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of T Mobile i.e., T Mobile and Cable One go up and down completely randomly.
Pair Corralation between T Mobile and Cable One
Given the investment horizon of 90 days T Mobile is expected to generate 2.54 times less return on investment than Cable One. But when comparing it to its historical volatility, T Mobile is 3.3 times less risky than Cable One. It trades about 0.39 of its potential returns per unit of risk. Cable One is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 33,801 in Cable One on August 30, 2024 and sell it today you would earn a total of 8,156 from holding Cable One or generate 24.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. Cable One
Performance |
| Timeline |
| T Mobile |
| Cable One |
T Mobile and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Mobile and Cable One
The main advantage of trading using opposite T Mobile and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| T Mobile vs. ATT Inc | T Mobile vs. Comcast Corp | T Mobile vs. Lumen Technologies | T Mobile vs. Verizon Communications |
| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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