Correlation Between U S Cellular and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both U S Cellular 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 U S Cellular and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Cellular and Vodafone Group PLC, you can compare the effects of market volatilities on U S Cellular 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 U S Cellular with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of U S Cellular and Vodafone Group.
Diversification Opportunities for U S Cellular and Vodafone Group
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USM and Vodafone is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular 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 U S Cellular 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 United States Cellular 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 U S Cellular i.e., U S Cellular and Vodafone Group go up and down completely randomly.
Pair Corralation between U S Cellular and Vodafone Group
Considering the 90-day investment horizon United States Cellular is expected to generate 1.5 times more return on investment than Vodafone Group. However, U S Cellular is 1.5 times more volatile than Vodafone Group PLC. It trades about 0.14 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.1 per unit of risk. If you would invest 5,465 in United States Cellular on August 30, 2024 and sell it today you would earn a total of 899.00 from holding United States Cellular or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
United States Cellular vs. Vodafone Group PLC
Performance |
| Timeline |
| United States Cellular |
| Vodafone Group PLC |
U S Cellular and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U S Cellular and Vodafone Group
The main advantage of trading using opposite U S Cellular and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular 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.| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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