Correlation Between Shenandoah Telecommunicatio and ATN International

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

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

Diversification Opportunities for Shenandoah Telecommunicatio and ATN International

0.44

Correlation Coefficient

Shenandoah Telecommunicatio  ATN International

Very weak diversification

The 3 months correlation between Shenandoah and ATN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and ATN International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN International 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 Co are associated (or correlated) with ATN International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATN International has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and ATN International go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and ATN International

Given the investment horizon of 90 days Shenandoah Telecommunicatio is expected to generate 3.14 times less return on investment than ATN International. But when comparing it to its historical volatility, Shenandoah Telecommunications Co is 1.13 times less risky than ATN International. It trades about 0.06 of its potential returns per unit of risk. ATN International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,632  in ATN International on December 29, 2024 and sell it today you would earn a total of  561.00  from holding ATN International or generate 34.38% return on investment over 90 days.

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

Shenandoah Telecommunications   vs.  ATN International

Shenandoah Telecommunicatio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenandoah Telecommunications Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Shenandoah Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ATN International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATN International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, ATN International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenandoah Telecommunicatio and ATN International

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

The idea behind Shenandoah Telecommunications Co and ATN International 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.