Correlation Between Shenandoah Telecommunicatio and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and AEGEAN AIRLINES 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 AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and AEGEAN AIRLINES, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and AEGEAN AIRLINES 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 AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and AEGEAN AIRLINES.
Diversification Opportunities for Shenandoah Telecommunicatio and AEGEAN AIRLINES
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shenandoah and AEGEAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES 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 AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and AEGEAN AIRLINES
Assuming the 90 days horizon Shenandoah Telecommunications is expected to generate 3.41 times more return on investment than AEGEAN AIRLINES. However, Shenandoah Telecommunicatio is 3.41 times more volatile than AEGEAN AIRLINES. It trades about -0.01 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.16 per unit of risk. If you would invest 1,340 in Shenandoah Telecommunications on September 3, 2024 and sell it today you would lose (100.00) from holding Shenandoah Telecommunications or give up 7.46% 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. AEGEAN AIRLINES
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| AEGEAN AIRLINES |
Shenandoah Telecommunicatio and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and AEGEAN AIRLINES
The main advantage of trading using opposite Shenandoah Telecommunicatio and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.| Shenandoah Telecommunicatio vs. T Mobile | Shenandoah Telecommunicatio vs. China Mobile Limited | Shenandoah Telecommunicatio vs. ATT Inc | Shenandoah Telecommunicatio vs. Nippon Telegraph and |
| AEGEAN AIRLINES vs. TOTAL GABON | AEGEAN AIRLINES vs. Walgreens Boots Alliance | AEGEAN AIRLINES vs. Peak Resources Limited |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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