Correlation Between Eastinco Mining and Vodafone Group

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

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

Diversification Opportunities for Eastinco Mining and Vodafone Group

0.68

Correlation Coefficient

Eastinco Mining  Vodafone Group

Poor diversification

The 3 months correlation between Eastinco and Vodafone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Vodafone Group go up and down completely randomly.

Pair Corralation between Eastinco Mining and Vodafone Group

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to under-perform the Vodafone Group. In addition to that, Eastinco Mining is 1.01 times more volatile than Vodafone Group PLC. It trades about -0.17 of its total potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.07 per unit of volatility. If you would invest  971.00  in Vodafone Group PLC on September 1, 2024 and sell it today you would lose (77.00) from holding Vodafone Group PLC or give up 7.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Eastinco Mining Exploration  vs.  Vodafone Group PLC

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Vodafone Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vodafone Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Eastinco Mining and Vodafone Group

The main advantage of trading using opposite Eastinco Mining and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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 Eastinco Mining Exploration 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.