Correlation Between XRP and T Mobile
Can any of the company-specific risk be diversified away by investing in both XRP 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 XRP and T Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and T Mobile, you can compare the effects of market volatilities on XRP 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 XRP with a short position of T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and T Mobile.
Diversification Opportunities for XRP and T Mobile
Very good diversification
The 3 months correlation between XRP and TMUS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding XRP and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and XRP 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 XRP 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 XRP i.e., XRP and T Mobile go up and down completely randomly.
Pair Corralation between XRP and T Mobile
Assuming the 90 days trading horizon XRP is expected to generate 2.83 times more return on investment than T Mobile. However, XRP is 2.83 times more volatile than T Mobile. It trades about 0.28 of its potential returns per unit of risk. T Mobile is currently generating about 0.18 per unit of risk. If you would invest 233.00 in XRP on November 1, 2024 and sell it today you would earn a total of 74.00 from holding XRP or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
XRP vs. T Mobile
Performance |
| Timeline |
| XRP |
| T Mobile |
XRP and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and T Mobile
The main advantage of trading using opposite XRP and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP 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.The idea behind XRP and T Mobile 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.| T Mobile vs. ATT Inc | T Mobile vs. Comcast Corp | T Mobile vs. Lumen Technologies | T Mobile vs. Verizon Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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