Correlation Between Food Life and VODAFONE GRP
Can any of the company-specific risk be diversified away by investing in both Food Life and VODAFONE GRP 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 Food Life and VODAFONE GRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and VODAFONE GRP SP, you can compare the effects of market volatilities on Food Life and VODAFONE GRP 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 Food Life with a short position of VODAFONE GRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and VODAFONE GRP.
Diversification Opportunities for Food Life and VODAFONE GRP
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Food and VODAFONE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and VODAFONE GRP SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VODAFONE GRP SP and Food Life 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 Food Life Companies are associated (or correlated) with VODAFONE GRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VODAFONE GRP SP has no effect on the direction of Food Life i.e., Food Life and VODAFONE GRP go up and down completely randomly.
Pair Corralation between Food Life and VODAFONE GRP
Assuming the 90 days horizon Food Life Companies is expected to generate 0.92 times more return on investment than VODAFONE GRP. However, Food Life Companies is 1.09 times less risky than VODAFONE GRP. It trades about 0.42 of its potential returns per unit of risk. VODAFONE GRP SP is currently generating about 0.08 per unit of risk. If you would invest 1,780 in Food Life Companies on September 2, 2024 and sell it today you would earn a total of 360.00 from holding Food Life Companies or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. VODAFONE GRP SP
Performance |
| Timeline |
| Food Life Companies |
| VODAFONE GRP SP |
Food Life and VODAFONE GRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and VODAFONE GRP
The main advantage of trading using opposite Food Life and VODAFONE GRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, VODAFONE GRP 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 VODAFONE GRP will offset losses from the drop in VODAFONE GRP's long position.| Food Life vs. Insurance Australia Group | Food Life vs. United Insurance Holdings | Food Life vs. American Airlines Group | Food Life vs. SINGAPORE AIRLINES |
| VODAFONE GRP vs. Beyond Meat | VODAFONE GRP vs. AUSTEVOLL SEAFOOD | VODAFONE GRP vs. AXWAY SOFTWARE EO | VODAFONE GRP vs. Food Life Companies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |