Correlation Between Argo Group and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Argo Group and Vodafone Group 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 Argo Group and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Limited and Vodafone Group PLC, you can compare the effects of market volatilities on Argo Group and Vodafone Group 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 Argo Group with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Vodafone Group.
Diversification Opportunities for Argo Group and Vodafone Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Argo and Vodafone is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC and Argo 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 Argo Group Limited are associated (or correlated) with Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Argo Group i.e., Argo Group and Vodafone Group go up and down completely randomly.
Pair Corralation between Argo Group and Vodafone Group
Assuming the 90 days trading horizon Argo Group Limited is expected to generate 1.89 times more return on investment than Vodafone Group. However, Argo Group is 1.89 times more volatile than Vodafone Group PLC. It trades about 0.02 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.04 per unit of risk. If you would invest 400.00 in Argo Group Limited on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Argo Group Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group Limited vs. Vodafone Group PLC
Performance |
| Timeline |
| Argo Group Limited |
| Vodafone Group PLC |
Argo Group and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Vodafone Group
The main advantage of trading using opposite Argo Group and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Vodafone Group 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 Group will offset losses from the drop in Vodafone Group's long position.| Argo Group vs. Neometals | Argo Group vs. Associated British Foods | Argo Group vs. Leroy Seafood Group | Argo Group vs. McEwen Mining |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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