Correlation Between ATT and T Mobile
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and T Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and T Mobile, you can compare the effects of market volatilities on ATT 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 ATT with a short position of T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and T Mobile.
Diversification Opportunities for ATT and T Mobile
Significant diversification
The 3 months correlation between ATT and TMUS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and ATT 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 ATT Inc 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 ATT i.e., ATT and T Mobile go up and down completely randomly.
Pair Corralation between ATT and T Mobile
Taking into account the 90-day investment horizon ATT is expected to generate 1.24 times less return on investment than T Mobile. In addition to that, ATT is 1.56 times more volatile than T Mobile. It trades about 0.05 of its total potential returns per unit of risk. T Mobile is currently generating about 0.09 per unit of volatility. If you would invest 13,400 in T Mobile on January 25, 2024 and sell it today you would earn a total of 2,925 from holding T Mobile or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. T Mobile
Performance |
| Timeline |
| ATT Inc |
| T Mobile |
ATT and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and T Mobile
The main advantage of trading using opposite ATT and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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 ATT Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |