Correlation Between Shenandoah Telecommunicatio and IDT

Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and IDT 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 IDT 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 IDT Corporation, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and IDT 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 IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and IDT.

Diversification Opportunities for Shenandoah Telecommunicatio and IDT

-0.57

Correlation Coefficient

Shenandoah Telecommunicatio  IDT

Excellent diversification

The 3 months correlation between Shenandoah and IDT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation 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 IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and IDT go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and IDT

Given the investment horizon of 90 days Shenandoah Telecommunications Co is expected to under-perform the IDT. In addition to that, Shenandoah Telecommunicatio is 1.32 times more volatile than IDT Corporation. It trades about 0.0 of its total potential returns per unit of risk. IDT Corporation is currently generating about 0.07 per unit of volatility. If you would invest  2,931  in IDT Corporation on September 4, 2024 and sell it today you would earn a total of  2,280  from holding IDT Corporation or generate 77.79% 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.  IDT Corp.

Shenandoah Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenandoah Telecommunications Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

IDT Corporation

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDT Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, IDT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenandoah Telecommunicatio and IDT

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

The idea behind Shenandoah Telecommunications Co and IDT Corporation 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.