Correlation Between Shenandoah Telecommunicatio and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and STORE ELECTRONIC 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 STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and STORE ELECTRONIC, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and STORE ELECTRONIC.
Diversification Opportunities for Shenandoah Telecommunicatio and STORE ELECTRONIC
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenandoah and STORE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and STORE ELECTRONIC
Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the STORE ELECTRONIC. But the stock apears to be less risky and, when comparing its historical volatility, Shenandoah Telecommunications is 1.91 times less risky than STORE ELECTRONIC. The stock trades about -0.26 of its potential returns per unit of risk. The STORE ELECTRONIC is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 13,460 in STORE ELECTRONIC on October 18, 2024 and sell it today you would earn a total of 2,620 from holding STORE ELECTRONIC or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenandoah Telecommunications vs. STORE ELECTRONIC
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| STORE ELECTRONIC |
Shenandoah Telecommunicatio and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and STORE ELECTRONIC
The main advantage of trading using opposite Shenandoah Telecommunicatio and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Shenandoah Telecommunicatio vs. GAMING FAC SA | Shenandoah Telecommunicatio vs. Penn National Gaming | Shenandoah Telecommunicatio vs. PENN NATL GAMING | Shenandoah Telecommunicatio vs. CANON MARKETING JP |
| STORE ELECTRONIC vs. INTERNET INJPADR 1 | STORE ELECTRONIC vs. Shenandoah Telecommunications | STORE ELECTRONIC vs. EIDESVIK OFFSHORE NK | STORE ELECTRONIC vs. CSSC Offshore Marine |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |