Correlation Between GAMING FAC and Shenandoah Telecommunicatio

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Can any of the company-specific risk be diversified away by investing in both GAMING FAC and Shenandoah Telecommunicatio 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 GAMING FAC and Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and Shenandoah Telecommunications, you can compare the effects of market volatilities on GAMING FAC and Shenandoah Telecommunicatio 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 GAMING FAC with a short position of Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and Shenandoah Telecommunicatio.

Diversification Opportunities for GAMING FAC and Shenandoah Telecommunicatio

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between GAMING and Shenandoah is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of GAMING FAC i.e., GAMING FAC and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between GAMING FAC and Shenandoah Telecommunicatio

Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.21 times more return on investment than Shenandoah Telecommunicatio. However, GAMING FAC is 1.21 times more volatile than Shenandoah Telecommunications. It trades about 0.04 of its potential returns per unit of risk. Shenandoah Telecommunications is currently generating about -0.01 per unit of risk. If you would invest  124.00  in GAMING FAC SA on October 17, 2024 and sell it today you would earn a total of  53.00  from holding GAMING FAC SA or generate 42.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GAMING FAC SA  vs.  Shenandoah Telecommunications

 Performance 
       Timeline  
GAMING FAC SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GAMING FAC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GAMING FAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Shenandoah Telecommunicatio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

GAMING FAC and Shenandoah Telecommunicatio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GAMING FAC and Shenandoah Telecommunicatio

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

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