Correlation Between Vodafone Group and Hellenic Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Hellenic Telecommunicatio 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 Hellenic Telecommunicatio 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 Hellenic Telecommunications Org, you can compare the effects of market volatilities on Vodafone Group and Hellenic Telecommunicatio 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 Hellenic Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Hellenic Telecommunicatio.
Diversification Opportunities for Vodafone Group and Hellenic Telecommunicatio
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vodafone and Hellenic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Hellenic Telecommunications Or in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hellenic Telecommunicatio 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 Hellenic Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hellenic Telecommunicatio has no effect on the direction of Vodafone Group i.e., Vodafone Group and Hellenic Telecommunicatio go up and down completely randomly.
Pair Corralation between Vodafone Group and Hellenic Telecommunicatio
Considering the 90-day investment horizon Vodafone Group PLC is expected to under-perform the Hellenic Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Vodafone Group PLC is 1.19 times less risky than Hellenic Telecommunicatio. The stock trades about -0.13 of its potential returns per unit of risk. The Hellenic Telecommunications Org is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 863.00 in Hellenic Telecommunications Org on August 25, 2024 and sell it today you would lose (57.00) from holding Hellenic Telecommunications Org or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. Hellenic Telecommunications Or
Performance |
| Timeline |
| Vodafone Group PLC |
| Hellenic Telecommunicatio |
Vodafone Group and Hellenic Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and Hellenic Telecommunicatio
The main advantage of trading using opposite Vodafone Group and Hellenic Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, Hellenic Telecommunicatio 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 Hellenic Telecommunicatio will offset losses from the drop in Hellenic Telecommunicatio's long position.| Vodafone Group vs. Telefonica Brasil SA | Vodafone Group vs. Orange SA ADR | Vodafone Group vs. Grupo Televisa SAB | Vodafone Group vs. America Movil SAB |
| Hellenic Telecommunicatio vs. PCCW Limited | Hellenic Telecommunicatio vs. Telenor ASA ADR | Hellenic Telecommunicatio vs. Orange SA ADR | Hellenic Telecommunicatio vs. Telefonica SA ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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