Correlation Between Shenandoah Telecommunicatio and UTD OV

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

By analyzing existing cross correlation between Shenandoah Telecommunications and UTD OV BK LOC ADR1, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and UTD OV 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 UTD OV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and UTD OV.

Diversification Opportunities for Shenandoah Telecommunicatio and UTD OV

-0.4

Correlation Coefficient

Shenandoah Telecommunicatio  UTD OV

Very good diversification

The 3 months correlation between Shenandoah and UTD is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and UTD OV BK LOC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTD OV BK 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 UTD OV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTD OV BK has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and UTD OV go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and UTD OV

Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the UTD OV. In addition to that, Shenandoah Telecommunicatio is 2.62 times more volatile than UTD OV BK LOC ADR1. It trades about -0.13 of its total potential returns per unit of risk. UTD OV BK LOC ADR1 is currently generating about 0.11 per unit of volatility. If you would invest  5,100  in UTD OV BK LOC ADR1 on December 2, 2024 and sell it today you would earn a total of  300.00  from holding UTD OV BK LOC ADR1 or generate 5.88% return on investment over 90 days.

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

Shenandoah Telecommunications  vs.  UTD OV BK LOC ADR1

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.

UTD OV BK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UTD OV BK LOC ADR1 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, UTD OV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Shenandoah Telecommunicatio and UTD OV

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

The idea behind Shenandoah Telecommunications and UTD OV BK LOC ADR1 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.