Correlation Between U S Cellular and Telephone
Can any of the company-specific risk be diversified away by investing in both U S Cellular and Telephone 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 U S Cellular and Telephone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Cellular and Telephone and Data, you can compare the effects of market volatilities on U S Cellular and Telephone 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 U S Cellular with a short position of Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of U S Cellular and Telephone.
Diversification Opportunities for U S Cellular and Telephone
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between USM and Telephone is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data and U S Cellular 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 United States Cellular are associated (or correlated) with Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of U S Cellular i.e., U S Cellular and Telephone go up and down completely randomly.
Pair Corralation between U S Cellular and Telephone
Considering the 90-day investment horizon U S Cellular is expected to generate 17.87 times less return on investment than Telephone. In addition to that, U S Cellular is 1.03 times more volatile than Telephone and Data. It trades about 0.02 of its total potential returns per unit of risk. Telephone and Data is currently generating about 0.31 per unit of volatility. If you would invest 1,801 in Telephone and Data on November 3, 2024 and sell it today you would earn a total of 139.00 from holding Telephone and Data or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Cellular vs. Telephone and Data
Performance |
| Timeline |
| United States Cellular |
| Telephone and Data |
U S Cellular and Telephone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U S Cellular and Telephone
The main advantage of trading using opposite U S Cellular and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular position performs unexpectedly, Telephone 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 Telephone will offset losses from the drop in Telephone's long position.| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
| Telephone vs. Telephone and Data | Telephone vs. ATT Inc | Telephone vs. Liberty Broadband Corp | Telephone vs. SiriusPoint |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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