Correlation Between Vodafone Group and América Móvil,

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

Diversification Opportunities for Vodafone Group and América Móvil,

-0.09

Correlation Coefficient

Vodafone Group  América Móvil,

Good diversification

The 3 months correlation between Vodafone and América is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Amrica Mvil, SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amrica Mvil, SAB 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 América Móvil,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amrica Mvil, SAB has no effect on the direction of Vodafone Group i.e., Vodafone Group and América Móvil, go up and down completely randomly.

Pair Corralation between Vodafone Group and América Móvil,

Assuming the 90 days horizon Vodafone Group PLC is expected to generate 1.08 times more return on investment than América Móvil,. However, Vodafone Group is 1.08 times more volatile than Amrica Mvil, SAB. It trades about 0.1 of its potential returns per unit of risk. Amrica Mvil, SAB is currently generating about -0.01 per unit of risk. If you would invest  81.00  in Vodafone Group PLC on December 23, 2024 and sell it today you would earn a total of  16.00  from holding Vodafone Group PLC or generate 19.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Vodafone Group PLC  vs.  Amrica Mvil, SAB

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 7 (%) 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.

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 nearly stable basic indicators, América Móvil, is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vodafone Group and América Móvil,

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

The idea behind Vodafone Group PLC and Amrica Mvil, SAB 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.