Correlation Between United Internet and T-Mobile
Can any of the company-specific risk be diversified away by investing in both United Internet and T-Mobile 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 United Internet and T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and T Mobile, you can compare the effects of market volatilities on United Internet and T-Mobile 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 United Internet with a short position of T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and T-Mobile.
Diversification Opportunities for United Internet and T-Mobile
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and T-Mobile is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and United Internet 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 Internet AG are associated (or correlated) with T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of United Internet i.e., United Internet and T-Mobile go up and down completely randomly.
Pair Corralation between United Internet and T-Mobile
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the T-Mobile. In addition to that, United Internet is 2.33 times more volatile than T Mobile. It trades about -0.24 of its total potential returns per unit of risk. T Mobile is currently generating about 0.41 per unit of volatility. If you would invest 20,428 in T Mobile on September 3, 2024 and sell it today you would earn a total of 2,782 from holding T Mobile or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. T Mobile
Performance |
| Timeline |
| United Internet AG |
| T Mobile |
United Internet and T-Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and T-Mobile
The main advantage of trading using opposite United Internet and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, T-Mobile 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 T-Mobile will offset losses from the drop in T-Mobile's long position.| United Internet vs. T Mobile | United Internet vs. China Mobile Limited | United Internet vs. ATT Inc | United Internet vs. Nippon Telegraph and |
| T-Mobile vs. Sims Metal Management | T-Mobile vs. Virtus Investment Partners | T-Mobile vs. CeoTronics AG | T-Mobile vs. PennantPark Investment |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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