Correlation Between Shenandoah Telecommunicatio and CSL

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

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

Diversification Opportunities for Shenandoah Telecommunicatio and CSL

0.49

Correlation Coefficient

Shenandoah Telecommunicatio  CSL

Very weak diversification

The 3 months correlation between Shenandoah and CSL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and CSL go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and CSL

Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the CSL. In addition to that, Shenandoah Telecommunicatio is 1.86 times more volatile than CSL LTD SPONADR. It trades about -0.37 of its total potential returns per unit of risk. CSL LTD SPONADR is currently generating about -0.21 per unit of volatility. If you would invest  8,350  in CSL LTD SPONADR on October 26, 2024 and sell it today you would lose (300.00) from holding CSL LTD SPONADR or give up 3.59% of portfolio value over 90 days.

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

Shenandoah Telecommunications  vs.  CSL LTD SPONADR

Shenandoah Telecommunicatio

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CSL LTD SPONADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL LTD SPONADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward-looking indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Shenandoah Telecommunicatio and CSL

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

The idea behind Shenandoah Telecommunications and CSL LTD SPONADR 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.