Correlation Between Vodafone Group and Cibl

Can any of the company-specific risk be diversified away by investing in both Vodafone Group and Cibl 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 Cibl 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 Cibl Inc, you can compare the effects of market volatilities on Vodafone Group and Cibl 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 Cibl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Cibl.

Diversification Opportunities for Vodafone Group and Cibl

0.06

Correlation Coefficient

Vodafone Group  Cibl

Significant diversification

The 3 months correlation between Vodafone and Cibl is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Cibl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibl Inc 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 Cibl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibl Inc has no effect on the direction of Vodafone Group i.e., Vodafone Group and Cibl go up and down completely randomly.

Pair Corralation between Vodafone Group and Cibl

Considering the 90-day investment horizon Vodafone Group PLC is expected to generate 0.8 times more return on investment than Cibl. However, Vodafone Group PLC is 1.25 times less risky than Cibl. It trades about 0.12 of its potential returns per unit of risk. Cibl Inc is currently generating about -0.04 per unit of risk. If you would invest  842.00  in Vodafone Group PLC on December 28, 2024 and sell it today you would earn a total of  94.00  from holding Vodafone Group PLC or generate 11.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vodafone Group PLC  vs.  Cibl Inc

Vodafone Group PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Vodafone Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cibl Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cibl Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Cibl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vodafone Group and Cibl

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

The idea behind Vodafone Group PLC and Cibl Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.