Correlation Between Vodafone Group and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Amedeo Air 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 Vodafone Group and Amedeo Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodafone Group PLC and Amedeo Air Four, you can compare the effects of market volatilities on Vodafone Group and Amedeo Air 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 Vodafone Group with a short position of Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Amedeo Air.
Diversification Opportunities for Vodafone Group and Amedeo Air
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vodafone and Amedeo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four and Vodafone 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 Vodafone Group PLC are associated (or correlated) with Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Vodafone Group i.e., Vodafone Group and Amedeo Air go up and down completely randomly.
Pair Corralation between Vodafone Group and Amedeo Air
Assuming the 90 days trading horizon Vodafone Group PLC is expected to generate 2.2 times more return on investment than Amedeo Air. However, Vodafone Group is 2.2 times more volatile than Amedeo Air Four. It trades about 0.18 of its potential returns per unit of risk. Amedeo Air Four is currently generating about 0.13 per unit of risk. If you would invest 6,800 in Vodafone Group PLC on December 8, 2024 and sell it today you would earn a total of 450.00 from holding Vodafone Group PLC or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vodafone Group PLC vs. Amedeo Air Four
Performance |
| Timeline |
| Vodafone Group PLC |
| Amedeo Air Four |
Vodafone Group and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and Amedeo Air
The main advantage of trading using opposite Vodafone Group and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| Vodafone Group vs. Bigblu Broadband PLC | Vodafone Group vs. United States Steel | Vodafone Group vs. Westlake Chemical Corp | Vodafone Group vs. Tata Steel Limited |
| Amedeo Air vs. Symphony Environmental Technologies | Amedeo Air vs. Iron Mountain | Amedeo Air vs. JLEN Environmental Assets | Amedeo Air vs. Evolution Gaming Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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