Correlation Between T Mobile and Comcast Corp

Can any of the company-specific risk be diversified away by investing in both T Mobile and Comcast Corp 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 Comcast Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T Mobile and Comcast Corp, you can compare the effects of market volatilities on T Mobile and Comcast Corp 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 Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and Comcast Corp.

Diversification Opportunities for T Mobile and Comcast Corp

-0.15

Correlation Coefficient

T Mobile  Comcast Corp

Good diversification

The 3 months correlation between TMUS and Comcast is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of T Mobile i.e., T Mobile and Comcast Corp go up and down completely randomly.

Pair Corralation between T Mobile and Comcast Corp

Given the investment horizon of 90 days T Mobile is expected to generate 0.28 times more return on investment than Comcast Corp. However, T Mobile is 3.54 times less risky than Comcast Corp. It trades about 0.17 of its potential returns per unit of risk. Comcast Corp is currently generating about -0.23 per unit of risk. If you would invest  16,208  in T Mobile on February 2, 2024 and sell it today you would earn a total of  283.00  from holding T Mobile or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

T Mobile  vs.  Comcast Corp

T Mobile

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, T Mobile is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Comcast Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with T Mobile and Comcast Corp

The main advantage of trading using opposite T Mobile and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile position performs unexpectedly, Comcast Corp 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 Comcast Corp will offset losses from the drop in Comcast Corp's long position.

The idea behind T Mobile and Comcast Corp 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.