Correlation Between Vodafone Group and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Telecom Argentina 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 Telecom Argentina 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 Telecom Argentina SA, you can compare the effects of market volatilities on Vodafone Group and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Telecom Argentina.
Diversification Opportunities for Vodafone Group and Telecom Argentina
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vodafone and Telecom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Vodafone Group i.e., Vodafone Group and Telecom Argentina go up and down completely randomly.
Pair Corralation between Vodafone Group and Telecom Argentina
Considering the 90-day investment horizon Vodafone Group PLC is not expected to generate positive returns. However, Vodafone Group PLC is 2.12 times less risky than Telecom Argentina. It waists most of its returns potential to compensate for thr risk taken. Telecom Argentina is generating about 0.08 per unit of risk. If you would invest 434.00 in Telecom Argentina SA on August 24, 2024 and sell it today you would earn a total of 851.00 from holding Telecom Argentina SA or generate 196.08% 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. Telecom Argentina SA
Performance |
| Timeline |
| Vodafone Group PLC |
| Telecom Argentina |
Vodafone Group and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and Telecom Argentina
The main advantage of trading using opposite Vodafone Group and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina'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 |
| Telecom Argentina vs. Telefonica SA ADR | Telecom Argentina vs. Orange SA ADR | Telecom Argentina vs. SK Telecom Co | Telecom Argentina vs. America Movil SAB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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