Correlation Between IHS Holding and Shenandoah Telecommunicatio

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

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

Diversification Opportunities for IHS Holding and Shenandoah Telecommunicatio

0.14

Correlation Coefficient

IHS Holding  Shenandoah Telecommunicatio

Average diversification

The 3 months correlation between IHS and Shenandoah is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding IHS Holding and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and IHS Holding 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 IHS Holding 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 IHS Holding i.e., IHS Holding and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between IHS Holding and Shenandoah Telecommunicatio

Considering the 90-day investment horizon IHS Holding is expected to generate 0.97 times more return on investment than Shenandoah Telecommunicatio. However, IHS Holding is 1.04 times less risky than Shenandoah Telecommunicatio. It trades about 0.01 of its potential returns per unit of risk. Shenandoah Telecommunications Co is currently generating about -0.05 per unit of risk. If you would invest  306.00  in IHS Holding on September 29, 2024 and sell it today you would lose (6.00) from holding IHS Holding or give up 1.96% of portfolio value over 90 days.

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

IHS Holding  vs.  Shenandoah Telecommunications

IHS Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IHS Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, IHS Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Shenandoah Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenandoah Telecommunications Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with IHS Holding and Shenandoah Telecommunicatio

The main advantage of trading using opposite IHS Holding and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHS Holding 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 IHS Holding and Shenandoah Telecommunications Co 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.