Correlation Between Shenandoah Telecommunicatio and LODESTAR MIN

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

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

Diversification Opportunities for Shenandoah Telecommunicatio and LODESTAR MIN

-0.25

Correlation Coefficient

Shenandoah Telecommunicatio  LODESTAR MIN

Very good diversification

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

Pair Corralation between Shenandoah Telecommunicatio and LODESTAR MIN

Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the LODESTAR MIN. In addition to that, Shenandoah Telecommunicatio is 158.46 times more volatile than LODESTAR MIN. It trades about -0.13 of its total potential returns per unit of risk. LODESTAR MIN is currently generating about -0.13 per unit of volatility. If you would invest  8.78  in LODESTAR MIN on December 2, 2024 and sell it today you would lose (0.01) from holding LODESTAR MIN or give up 0.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Shenandoah Telecommunications  vs.  LODESTAR MIN

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 fragile 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.

LODESTAR MIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days LODESTAR MIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, LODESTAR MIN is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Shenandoah Telecommunicatio and LODESTAR MIN

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

The idea behind Shenandoah Telecommunications and LODESTAR MIN 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.