Correlation Between Shenandoah Telecommunicatio and Lumen Technologies
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and Lumen Technologies 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 Lumen Technologies 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 Lumen Technologies, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and Lumen Technologies 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 Lumen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and Lumen Technologies.
Diversification Opportunities for Shenandoah Telecommunicatio and Lumen Technologies
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shenandoah and Lumen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and Lumen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies 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 Lumen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and Lumen Technologies go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and Lumen Technologies
Given the investment horizon of 90 days Shenandoah Telecommunications Co is expected to under-perform the Lumen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Shenandoah Telecommunications Co is 1.29 times less risky than Lumen Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Lumen Technologies is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 613.00 in Lumen Technologies on August 24, 2024 and sell it today you would earn a total of 210.00 from holding Lumen Technologies or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shenandoah Telecommunications vs. Lumen Technologies
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| Lumen Technologies |
Shenandoah Telecommunicatio and Lumen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and Lumen Technologies
The main advantage of trading using opposite Shenandoah Telecommunicatio and Lumen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, Lumen Technologies 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 Lumen Technologies will offset losses from the drop in Lumen Technologies' long position.| Shenandoah Telecommunicatio vs. Anterix | Shenandoah Telecommunicatio vs. Liberty Broadband Corp | Shenandoah Telecommunicatio vs. Ooma Inc | Shenandoah Telecommunicatio vs. IDT Corporation |
| Lumen Technologies vs. Verizon Communications | Lumen Technologies vs. T Mobile | Lumen Technologies vs. Comcast Corp | Lumen Technologies vs. ATT Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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