Correlation Between Telenor ASA and Shenandoah Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Telenor ASA 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 Telenor ASA and Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA ADR and Shenandoah Telecommunications Co, you can compare the effects of market volatilities on Telenor ASA 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 Telenor ASA with a short position of Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Shenandoah Telecommunicatio.
Diversification Opportunities for Telenor ASA and Shenandoah Telecommunicatio
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telenor and Shenandoah is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and Telenor ASA 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 Telenor ASA ADR 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 Telenor ASA i.e., Telenor ASA and Shenandoah Telecommunicatio go up and down completely randomly.
Pair Corralation between Telenor ASA and Shenandoah Telecommunicatio
Assuming the 90 days horizon Telenor ASA ADR is expected to generate 0.6 times more return on investment than Shenandoah Telecommunicatio. However, Telenor ASA ADR is 1.67 times less risky than Shenandoah Telecommunicatio. It trades about 0.34 of its potential returns per unit of risk. Shenandoah Telecommunications Co is currently generating about -0.16 per unit of risk. If you would invest 1,096 in Telenor ASA ADR on October 23, 2024 and sell it today you would earn a total of 79.00 from holding Telenor ASA ADR or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA ADR vs. Shenandoah Telecommunications
Performance |
| Timeline |
| Telenor ASA ADR |
| Shenandoah Telecommunicatio |
Telenor ASA and Shenandoah Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Shenandoah Telecommunicatio
The main advantage of trading using opposite Telenor ASA and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA 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.| Telenor ASA vs. PCCW Limited | Telenor ASA vs. Hellenic Telecommunications Org | Telenor ASA vs. Telefonica SA ADR | Telenor ASA vs. XL Axiata Tbk |
| Shenandoah Telecommunicatio vs. Anterix | Shenandoah Telecommunicatio vs. Liberty Broadband Corp | Shenandoah Telecommunicatio vs. Ooma Inc | Shenandoah Telecommunicatio vs. IDT Corporation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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