Correlation Between Vodafone Group and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Vodafone Group and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and PT Sarana.
Diversification Opportunities for Vodafone Group and PT Sarana
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vodafone and SMNUF is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Vodafone Group i.e., Vodafone Group and PT Sarana go up and down completely randomly.
Pair Corralation between Vodafone Group and PT Sarana
Assuming the 90 days horizon Vodafone Group PLC is expected to generate 0.53 times more return on investment than PT Sarana. However, Vodafone Group PLC is 1.9 times less risky than PT Sarana. It trades about 0.01 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.02 per unit of risk. If you would invest 99.00 in Vodafone Group PLC on August 29, 2024 and sell it today you would lose (11.00) from holding Vodafone Group PLC or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 36.89% |
| Values | Daily Returns |
Vodafone Group PLC vs. PT Sarana Menara
Performance |
| Timeline |
| Vodafone Group PLC |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vodafone Group and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and PT Sarana
The main advantage of trading using opposite Vodafone Group and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Vodafone Group vs. KDDI Corp | Vodafone Group vs. Amrica Mvil, SAB | Vodafone Group vs. ATT Inc | Vodafone Group vs. FingerMotion |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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