Correlation Between TIM Participacoes and U S Cellular

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Can any of the company-specific risk be diversified away by investing in both TIM Participacoes and U S Cellular 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 TIM Participacoes and U S Cellular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIM Participacoes SA and United States Cellular, you can compare the effects of market volatilities on TIM Participacoes and U S Cellular 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 TIM Participacoes with a short position of U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIM Participacoes and U S Cellular.

Diversification Opportunities for TIM Participacoes and U S Cellular

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between TIM and USM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding TIM Participacoes SA and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular and TIM Participacoes 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 TIM Participacoes SA are associated (or correlated) with U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of TIM Participacoes i.e., TIM Participacoes and U S Cellular go up and down completely randomly.

Pair Corralation between TIM Participacoes and U S Cellular

Given the investment horizon of 90 days TIM Participacoes SA is expected to generate 0.77 times more return on investment than U S Cellular. However, TIM Participacoes SA is 1.3 times less risky than U S Cellular. It trades about 0.09 of its potential returns per unit of risk. United States Cellular is currently generating about 0.06 per unit of risk. If you would invest  1,637  in TIM Participacoes SA on April 28, 2025 and sell it today you would earn a total of  162.00  from holding TIM Participacoes SA or generate 9.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TIM Participacoes SA  vs.  United States Cellular

 Performance 
       Timeline  
TIM Participacoes 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TIM Participacoes SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, TIM Participacoes may actually be approaching a critical reversion point that can send shares even higher in August 2025.
United States Cellular 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, U S Cellular may actually be approaching a critical reversion point that can send shares even higher in August 2025.

TIM Participacoes and U S Cellular Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TIM Participacoes and U S Cellular

The main advantage of trading using opposite TIM Participacoes and U S Cellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIM Participacoes position performs unexpectedly, U S Cellular 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 U S Cellular will offset losses from the drop in U S Cellular's long position.
The idea behind TIM Participacoes SA and United States Cellular 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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