Correlation Between Vodafone Group and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Uniper SE 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 Uniper SE 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 Uniper SE, you can compare the effects of market volatilities on Vodafone Group and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Uniper SE.
Diversification Opportunities for Vodafone Group and Uniper SE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vodafone and Uniper is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Vodafone Group i.e., Vodafone Group and Uniper SE go up and down completely randomly.
Pair Corralation between Vodafone Group and Uniper SE
Assuming the 90 days trading horizon Vodafone Group PLC is expected to generate 0.51 times more return on investment than Uniper SE. However, Vodafone Group PLC is 1.96 times less risky than Uniper SE. It trades about -0.2 of its potential returns per unit of risk. Uniper SE is currently generating about -0.12 per unit of risk. If you would invest 7,108 in Vodafone Group PLC on September 25, 2024 and sell it today you would lose (332.00) from holding Vodafone Group PLC or give up 4.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vodafone Group PLC vs. Uniper SE
Performance |
Timeline |
Vodafone Group PLC |
Uniper SE |
Vodafone Group and Uniper SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vodafone Group and Uniper SE
The main advantage of trading using opposite Vodafone Group and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.Vodafone Group vs. Uniper SE | Vodafone Group vs. Mulberry Group PLC | Vodafone Group vs. London Security Plc | Vodafone Group vs. Triad Group PLC |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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