Correlation Between FC Investment and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Vodafone Group PLC, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Vodafone Group.
Diversification Opportunities for FC Investment and Vodafone Group
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FCIT and Vodafone is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Vodafone Group go up and down completely randomly.
Pair Corralation between FC Investment and Vodafone Group
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.61 times more return on investment than Vodafone Group. However, FC Investment Trust is 1.63 times less risky than Vodafone Group. It trades about -0.05 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.3 per unit of risk. If you would invest 112,000 in FC Investment Trust on September 25, 2024 and sell it today you would lose (800.00) from holding FC Investment Trust or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Vodafone Group PLC
Performance |
| Timeline |
| FC Investment Trust |
| Vodafone Group PLC |
FC Investment and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Vodafone Group
The main advantage of trading using opposite FC Investment and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Samsung Electronics Co | FC Investment vs. Samsung Electronics Co | FC Investment vs. Hyundai Motor | FC Investment vs. Toyota Motor Corp |
| Vodafone Group vs. Taylor Maritime Investments | Vodafone Group vs. FC Investment Trust | Vodafone Group vs. Gaztransport et Technigaz | Vodafone Group vs. Federal Realty Investment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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