Correlation Between Vodafone Group and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Vodafone Group and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and GreenX Metals.
Diversification Opportunities for Vodafone Group and GreenX Metals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vodafone and GreenX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Vodafone Group i.e., Vodafone Group and GreenX Metals go up and down completely randomly.
Pair Corralation between Vodafone Group and GreenX Metals
Assuming the 90 days trading horizon Vodafone Group is expected to generate 2.7 times less return on investment than GreenX Metals. But when comparing it to its historical volatility, Vodafone Group PLC is 1.86 times less risky than GreenX Metals. It trades about 0.24 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,400 in GreenX Metals on October 24, 2024 and sell it today you would earn a total of 450.00 from holding GreenX Metals or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. GreenX Metals
Performance |
| Timeline |
| Vodafone Group PLC |
| GreenX Metals |
Vodafone Group and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and GreenX Metals
The main advantage of trading using opposite Vodafone Group and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Vodafone Group vs. GreenX Metals | Vodafone Group vs. Hochschild Mining plc | Vodafone Group vs. Coeur Mining | Vodafone Group vs. Adriatic Metals |
| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Ferrexpo PLC | GreenX Metals vs. Atalaya Mining |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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