Correlation Between Shenandoah Telecommunicatio and AIR CHINA
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and AIR CHINA 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 AIR CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and AIR CHINA LTD, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and AIR CHINA 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 AIR CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and AIR CHINA.
Diversification Opportunities for Shenandoah Telecommunicatio and AIR CHINA
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shenandoah and AIR is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD 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 AIR CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR CHINA LTD has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and AIR CHINA go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and AIR CHINA
Assuming the 90 days horizon Shenandoah Telecommunications is expected to generate 0.76 times more return on investment than AIR CHINA. However, Shenandoah Telecommunications is 1.32 times less risky than AIR CHINA. It trades about -0.15 of its potential returns per unit of risk. AIR CHINA LTD is currently generating about -0.14 per unit of risk. If you would invest 1,260 in Shenandoah Telecommunications on October 8, 2024 and sell it today you would lose (70.00) from holding Shenandoah Telecommunications or give up 5.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shenandoah Telecommunications vs. AIR CHINA LTD
Performance |
Timeline |
Shenandoah Telecommunicatio |
AIR CHINA LTD |
Shenandoah Telecommunicatio and AIR CHINA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenandoah Telecommunicatio and AIR CHINA
The main advantage of trading using opposite Shenandoah Telecommunicatio and AIR CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, AIR CHINA 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 AIR CHINA will offset losses from the drop in AIR CHINA's long position.Shenandoah Telecommunicatio vs. AIR PRODCHEMICALS | Shenandoah Telecommunicatio vs. SPARTAN STORES | Shenandoah Telecommunicatio vs. SIEM OFFSHORE NEW | Shenandoah Telecommunicatio vs. PICKN PAY STORES |
AIR CHINA vs. Wenzhou Kangning Hospital | AIR CHINA vs. Titan Machinery | AIR CHINA vs. Daito Trust Construction | AIR CHINA vs. Penta Ocean Construction Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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