Correlation Between Vodafone Group and QYOU Media

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

Diversification Opportunities for Vodafone Group and QYOU Media

-0.41

Correlation Coefficient

Vodafone Group  QYOU Media

Very good diversification

The 3 months correlation between Vodafone and QYOU is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and QYOU Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QYOU Media 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 QYOU Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QYOU Media has no effect on the direction of Vodafone Group i.e., Vodafone Group and QYOU Media go up and down completely randomly.

Pair Corralation between Vodafone Group and QYOU Media

Considering the 90-day investment horizon Vodafone Group is expected to generate 1.12 times less return on investment than QYOU Media. But when comparing it to its historical volatility, Vodafone Group PLC is 4.76 times less risky than QYOU Media. It trades about 0.13 of its potential returns per unit of risk. QYOU Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.38  in QYOU Media on December 28, 2024 and sell it today you would lose (0.08) from holding QYOU Media or give up 3.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Vodafone Group PLC  vs.  QYOU Media

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 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Vodafone Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

QYOU Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QYOU Media are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QYOU Media reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vodafone Group and QYOU Media

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

The idea behind Vodafone Group PLC and QYOU Media 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.