Correlation Between Shenandoah Telecommunicatio and PLDT

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

Diversification Opportunities for Shenandoah Telecommunicatio and PLDT

0.39

Correlation Coefficient

Shenandoah Telecommunicatio  PLDT

Weak diversification

The 3 months correlation between Shenandoah and PLDT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and PLDT Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc ADR 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc ADR has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and PLDT go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and PLDT

Given the investment horizon of 90 days Shenandoah Telecommunications Co is expected to generate 1.51 times more return on investment than PLDT. However, Shenandoah Telecommunicatio is 1.51 times more volatile than PLDT Inc ADR. It trades about -0.01 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about -0.01 per unit of risk. If you would invest  1,292  in Shenandoah Telecommunications Co on September 27, 2024 and sell it today you would lose (8.00) from holding Shenandoah Telecommunications Co or give up 0.62% 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.  PLDT Inc ADR

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.

PLDT Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLDT Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Shenandoah Telecommunicatio and PLDT

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

The idea behind Shenandoah Telecommunications Co and PLDT Inc ADR 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.