Correlation Between Shenandoah Telecommunicatio and FEMALE HEALTH

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

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

Diversification Opportunities for Shenandoah Telecommunicatio and FEMALE HEALTH

0.23

Correlation Coefficient

Shenandoah Telecommunicatio  FEMALE HEALTH

Modest diversification

The 3 months correlation between Shenandoah and FEMALE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and FEMALE HEALTH

Assuming the 90 days horizon Shenandoah Telecommunications is expected to generate 0.26 times more return on investment than FEMALE HEALTH. However, Shenandoah Telecommunications is 3.86 times less risky than FEMALE HEALTH. It trades about -0.04 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.01 per unit of risk. If you would invest  1,240  in Shenandoah Telecommunications on December 24, 2024 and sell it today you would lose (80.00) from holding Shenandoah Telecommunications or give up 6.45% of portfolio value over 90 days.

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

Shenandoah Telecommunications  vs.  FEMALE HEALTH

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 nearly stable basic indicators, Shenandoah Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FEMALE HEALTH

Risk-Adjusted Performance

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Shenandoah Telecommunicatio and FEMALE HEALTH

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

The idea behind Shenandoah Telecommunications and FEMALE HEALTH 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.