Correlation Between Vodafone Group and American International
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and American International 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 Vodafone Group and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodafone Group PLC and American International Group, you can compare the effects of market volatilities on Vodafone Group and American International 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 Vodafone Group with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and American International.
Diversification Opportunities for Vodafone Group and American International
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vodafone and American is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and Vodafone Group 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 Vodafone Group PLC are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Vodafone Group i.e., Vodafone Group and American International go up and down completely randomly.
Pair Corralation between Vodafone Group and American International
Assuming the 90 days trading horizon Vodafone Group PLC is expected to under-perform the American International. In addition to that, Vodafone Group is 1.07 times more volatile than American International Group. It trades about -0.01 of its total potential returns per unit of risk. American International Group is currently generating about 0.01 per unit of volatility. If you would invest 7,616 in American International Group on September 3, 2024 and sell it today you would earn a total of 109.00 from holding American International Group or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. American International Group
Performance |
| Timeline |
| Vodafone Group PLC |
| American International |
Vodafone Group and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and American International
The main advantage of trading using opposite Vodafone Group and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.| Vodafone Group vs. Norwegian Air Shuttle | Vodafone Group vs. Prosiebensat 1 Media | Vodafone Group vs. Sealed Air Corp | Vodafone Group vs. Flutter Entertainment PLC |
| American International vs. AMG Advanced Metallurgical | American International vs. Auction Technology Group | American International vs. McEwen Mining | American International vs. Polar Capital Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |