Correlation Between AEON MALL and Shenandoah Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both AEON MALL and Shenandoah Telecommunicatio 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 AEON MALL and Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEON MALL LTD and Shenandoah Telecommunications, you can compare the effects of market volatilities on AEON MALL and Shenandoah Telecommunicatio 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 AEON MALL with a short position of Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and Shenandoah Telecommunicatio.

Diversification Opportunities for AEON MALL and Shenandoah Telecommunicatio

0.25

Correlation Coefficient

AEON MALL  Shenandoah Telecommunicatio

Modest diversification

The 3 months correlation between AEON and Shenandoah is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and AEON MALL 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 AEON MALL LTD are associated (or correlated) with Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of AEON MALL i.e., AEON MALL and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between AEON MALL and Shenandoah Telecommunicatio

Assuming the 90 days horizon AEON MALL LTD is expected to generate 0.68 times more return on investment than Shenandoah Telecommunicatio. However, AEON MALL LTD is 1.48 times less risky than Shenandoah Telecommunicatio. It trades about 0.09 of its potential returns per unit of risk. Shenandoah Telecommunications is currently generating about -0.14 per unit of risk. If you would invest  1,224  in AEON MALL LTD on December 4, 2024 and sell it today you would earn a total of  96.00  from holding AEON MALL LTD or generate 7.84% return on investment over 90 days.

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

AEON MALL LTD  vs.  Shenandoah Telecommunications

AEON MALL LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AEON MALL LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AEON MALL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Shenandoah Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenandoah Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AEON MALL and Shenandoah Telecommunicatio

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

The idea behind AEON MALL LTD and Shenandoah Telecommunications 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.