Correlation Between T Mobile and IHS Holding
Can any of the company-specific risk be diversified away by investing in both T Mobile and IHS Holding 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 IHS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and IHS Holding, you can compare the effects of market volatilities on T Mobile and IHS Holding 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 IHS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and IHS Holding.
Diversification Opportunities for T Mobile and IHS Holding
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TMUS and IHS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and IHS Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHS 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 are associated (or correlated) with IHS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHS Holding has no effect on the direction of T Mobile i.e., T Mobile and IHS Holding go up and down completely randomly.
Pair Corralation between T Mobile and IHS Holding
Given the investment horizon of 90 days T Mobile is expected to generate 0.51 times more return on investment than IHS Holding. However, T Mobile is 1.96 times less risky than IHS Holding. It trades about 0.27 of its potential returns per unit of risk. IHS Holding is currently generating about 0.01 per unit of risk. If you would invest 19,801 in T Mobile on August 30, 2024 and sell it today you would earn a total of 4,819 from holding T Mobile or generate 24.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. IHS Holding
Performance |
| Timeline |
| T Mobile |
| IHS Holding |
T Mobile and IHS Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Mobile and IHS Holding
The main advantage of trading using opposite T Mobile and IHS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, IHS Holding 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 IHS Holding will offset losses from the drop in IHS Holding's long position.| T Mobile vs. Merck Company | T Mobile vs. Pharvaris BV | T Mobile vs. Brinker International | T Mobile vs. Alcoa Corp |
| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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