Correlation Between T Mobile and Keck Seng

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

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

Diversification Opportunities for T Mobile and Keck Seng

0.55

Correlation Coefficient

T Mobile  Keck Seng

Very weak diversification

The 3 months correlation between TM5 and Keck is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments 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 Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of T Mobile i.e., T Mobile and Keck Seng go up and down completely randomly.

Pair Corralation between T Mobile and Keck Seng

Assuming the 90 days horizon T Mobile is expected to generate 0.45 times more return on investment than Keck Seng. However, T Mobile is 2.23 times less risky than Keck Seng. It trades about -0.05 of its potential returns per unit of risk. Keck Seng Investments is currently generating about -0.14 per unit of risk. If you would invest  23,500  in T Mobile on January 13, 2025 and sell it today you would lose (830.00) from holding T Mobile or give up 3.53% of portfolio value over 90 days.

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

T Mobile  vs.  Keck Seng Investments

T Mobile

Risk-Adjusted Performance

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. Despite nearly uncertain basic indicators, T Mobile may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Keck Seng Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keck Seng Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with T Mobile and Keck Seng

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

The idea behind T Mobile and Keck Seng Investments 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..