Correlation Between Comcast Corp and T Mobile

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

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

Diversification Opportunities for Comcast Corp and T Mobile

0.43

Correlation Coefficient

Comcast Corp  T Mobile

Very weak diversification

The 3 months correlation between Comcast and TMUS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Comcast Corp and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and Comcast Corp 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 Comcast Corp 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 Comcast Corp i.e., Comcast Corp and T Mobile go up and down completely randomly.

Pair Corralation between Comcast Corp and T Mobile

Assuming the 90 days horizon Comcast Corp is expected to generate 4.71 times less return on investment than T Mobile. In addition to that, Comcast Corp is 1.33 times more volatile than T Mobile. It trades about 0.01 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  14,016  in T Mobile on October 1, 2024 and sell it today you would earn a total of  8,286  from holding T Mobile or generate 59.12% return on investment over 90 days.

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

Comcast Corp  vs.  T Mobile

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 latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

T Mobile

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T Mobile may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Comcast Corp and T Mobile

The main advantage of trading using opposite Comcast Corp and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast Corp 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 Comcast Corp 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.