Correlation Between Vodafone Group and U S Cellular
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and U S Cellular 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 U S Cellular 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 United States Cellular, you can compare the effects of market volatilities on Vodafone Group and U S Cellular 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 U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and U S Cellular.
Diversification Opportunities for Vodafone Group and U S Cellular
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vodafone and USM is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Vodafone Group i.e., Vodafone Group and U S Cellular go up and down completely randomly.
Pair Corralation between Vodafone Group and U S Cellular
Considering the 90-day investment horizon Vodafone Group is expected to generate 98.41 times less return on investment than U S Cellular. But when comparing it to its historical volatility, Vodafone Group PLC is 1.89 times less risky than U S Cellular. It trades about 0.0 of its potential returns per unit of risk. United States Cellular is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,822 in United States Cellular on August 24, 2024 and sell it today you would earn a total of 1,572 from holding United States Cellular or generate 32.6% 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. United States Cellular
Performance |
| Timeline |
| Vodafone Group PLC |
| United States Cellular |
Vodafone Group and U S Cellular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and U S Cellular
The main advantage of trading using opposite Vodafone Group and U S Cellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, U S Cellular 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 U S Cellular will offset losses from the drop in U S Cellular'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 |
| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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