Correlation Between Eastinco Mining and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining 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 Eastinco Mining and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastinco Mining Exploration and Vodafone Group PLC, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Vodafone Group.
Diversification Opportunities for Eastinco Mining and Vodafone Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastinco and Vodafone is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Vodafone Group go up and down completely randomly.
Pair Corralation between Eastinco Mining and Vodafone Group
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 114.9 times more return on investment than Vodafone Group. However, Eastinco Mining is 114.9 times more volatile than Vodafone Group PLC. It trades about 0.17 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.02 per unit of risk. If you would invest 0.65 in Eastinco Mining Exploration on September 3, 2024 and sell it today you would earn a total of 5,099 from holding Eastinco Mining Exploration or generate 784515.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Vodafone Group PLC
Performance |
| Timeline |
| Eastinco Mining Expl |
| Vodafone Group PLC |
Eastinco Mining and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Vodafone Group
The main advantage of trading using opposite Eastinco Mining and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.The idea behind Eastinco Mining Exploration and Vodafone Group PLC 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.| Vodafone Group vs. Norwegian Air Shuttle | Vodafone Group vs. Prosiebensat 1 Media | Vodafone Group vs. Sealed Air Corp | Vodafone Group vs. Flutter Entertainment PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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