Correlation Between Shenandoah Telecommunicatio and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and Westinghouse Air 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 Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and Westinghouse Air Brake, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and Westinghouse Air.
Diversification Opportunities for Shenandoah Telecommunicatio and Westinghouse Air
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenandoah and Westinghouse is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and Westinghouse Air go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and Westinghouse Air
Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the Westinghouse Air. In addition to that, Shenandoah Telecommunicatio is 1.97 times more volatile than Westinghouse Air Brake. It trades about -0.34 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.45 per unit of volatility. If you would invest 18,225 in Westinghouse Air Brake on October 30, 2024 and sell it today you would earn a total of 1,425 from holding Westinghouse Air Brake or generate 7.82% 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. Westinghouse Air Brake
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| Westinghouse Air Brake |
Shenandoah Telecommunicatio and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and Westinghouse Air
The main advantage of trading using opposite Shenandoah Telecommunicatio and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Shenandoah Telecommunicatio vs. AEON STORES | Shenandoah Telecommunicatio vs. UNIQA INSURANCE GR | Shenandoah Telecommunicatio vs. BJs Restaurants | Shenandoah Telecommunicatio vs. BANK OF CHINA |
| Westinghouse Air vs. Penn National Gaming | Westinghouse Air vs. Chengdu PUTIAN Telecommunications | Westinghouse Air vs. MAVEN WIRELESS SWEDEN | Westinghouse Air vs. Singapore Telecommunications 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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