Correlation Between Vodafone Group and ATT
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Vodafone Group and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and ATT.
Diversification Opportunities for Vodafone Group and ATT
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vodafone and ATT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Vodafone Group i.e., Vodafone Group and ATT go up and down completely randomly.
Pair Corralation between Vodafone Group and ATT
Considering the 90-day investment horizon Vodafone Group PLC is expected to under-perform the ATT. In addition to that, Vodafone Group is 2.67 times more volatile than ATT Inc. It trades about -0.02 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.25 per unit of volatility. If you would invest 2,212 in ATT Inc on September 2, 2024 and sell it today you would earn a total of 104.00 from holding ATT Inc or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vodafone Group PLC vs. ATT Inc
Performance |
| Timeline |
| Vodafone Group PLC |
| ATT Inc |
Vodafone Group and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and ATT
The main advantage of trading using opposite Vodafone Group and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Vodafone Group vs. TIM Participacoes SA | Vodafone Group vs. PLDT Inc ADR | Vodafone Group vs. Liberty Broadband Srs | Vodafone Group vs. Liberty Broadband Srs |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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