Correlation Between América Móvil, and Vodafone Group

Can any of the company-specific risk be diversified away by investing in both América Móvil, and Vodafone Group 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 América Móvil, and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amrica Mvil, SAB and Vodafone Group PLC, you can compare the effects of market volatilities on América Móvil, and Vodafone Group 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 América Móvil, with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of América Móvil, and Vodafone Group.

Diversification Opportunities for América Móvil, and Vodafone Group

-0.04

Correlation Coefficient

América Móvil,  Vodafone Group

Good diversification

The 3 months correlation between América and Vodafone is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Amrica Mvil, SAB and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC and América Móvil, 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 Amrica Mvil, SAB are associated (or correlated) with Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of América Móvil, i.e., América Móvil, and Vodafone Group go up and down completely randomly.

Pair Corralation between América Móvil, and Vodafone Group

Assuming the 90 days horizon Amrica Mvil, SAB is expected to under-perform the Vodafone Group. But the otc stock apears to be less risky and, when comparing its historical volatility, Amrica Mvil, SAB is 1.09 times less risky than Vodafone Group. The otc stock trades about -0.04 of its potential returns per unit of risk. The Vodafone Group PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  84.00  in Vodafone Group PLC on December 30, 2024 and sell it today you would earn a total of  8.00  from holding Vodafone Group PLC or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Amrica Mvil, SAB  vs.  Vodafone Group PLC

Amrica Mvil, SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amrica Mvil, SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Vodafone Group PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vodafone Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with América Móvil, and Vodafone Group

The main advantage of trading using opposite América Móvil, and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if América Móvil, position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.

The idea behind Amrica Mvil, SAB and Vodafone Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.