Correlation Between Vodafone Group and Admiral Group
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Admiral 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 Vodafone Group and Admiral Group 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 Admiral Group PLC, you can compare the effects of market volatilities on Vodafone Group and Admiral 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 Vodafone Group with a short position of Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Admiral Group.
Diversification Opportunities for Vodafone Group and Admiral Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vodafone and Admiral is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC 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 Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of Vodafone Group i.e., Vodafone Group and Admiral Group go up and down completely randomly.
Pair Corralation between Vodafone Group and Admiral Group
Assuming the 90 days trading horizon Vodafone Group PLC is expected to generate 1.78 times more return on investment than Admiral Group. However, Vodafone Group is 1.78 times more volatile than Admiral Group PLC. It trades about 0.0 of its potential returns per unit of risk. Admiral Group PLC is currently generating about -0.15 per unit of risk. If you would invest 7,178 in Vodafone Group PLC on August 30, 2024 and sell it today you would lose (42.00) from holding Vodafone Group PLC or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. Admiral Group PLC
Performance |
| Timeline |
| Vodafone Group PLC |
| Admiral Group PLC |
Vodafone Group and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and Admiral Group
The main advantage of trading using opposite Vodafone Group and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, Admiral 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| Vodafone Group vs. Gaztransport et Technigaz | Vodafone Group vs. Synchrony Financial | Vodafone Group vs. International Consolidated Airlines | Vodafone Group vs. Royal Bank of |
| Admiral Group vs. Power Metal Resources | Admiral Group vs. Fulcrum Metals PLC | Admiral Group vs. AMG Advanced Metallurgical | Admiral Group vs. Wheaton Precious Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |