Correlation Between Shenandoah Telecommunicatio and Rapid Micro

Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio and Rapid Micro 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 Rapid Micro 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 Rapid Micro Biosystems, you can compare the effects of market volatilities on Shenandoah Telecommunicatio and Rapid Micro 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 Rapid Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and Rapid Micro.

Diversification Opportunities for Shenandoah Telecommunicatio and Rapid Micro

-0.76

Correlation Coefficient

Shenandoah Telecommunicatio  Rapid Micro

Pay attention - limited upside

The 3 months correlation between Shenandoah and Rapid is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and Rapid Micro Biosystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapid Micro Biosystems 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 Rapid Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapid Micro Biosystems has no effect on the direction of Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and Rapid Micro go up and down completely randomly.

Pair Corralation between Shenandoah Telecommunicatio and Rapid Micro

Given the investment horizon of 90 days Shenandoah Telecommunications Co is expected to under-perform the Rapid Micro. In addition to that, Shenandoah Telecommunicatio is 1.56 times more volatile than Rapid Micro Biosystems. It trades about -0.06 of its total potential returns per unit of risk. Rapid Micro Biosystems is currently generating about 0.15 per unit of volatility. If you would invest  85.00  in Rapid Micro Biosystems on June 30, 2024 and sell it today you would earn a total of  5.00  from holding Rapid Micro Biosystems or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Shenandoah Telecommunications   vs.  Rapid Micro Biosystems

Shenandoah Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenandoah Telecommunications Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Rapid Micro Biosystems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Micro Biosystems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Rapid Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenandoah Telecommunicatio and Rapid Micro

The main advantage of trading using opposite Shenandoah Telecommunicatio and Rapid Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio position performs unexpectedly, Rapid Micro 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 Rapid Micro will offset losses from the drop in Rapid Micro's long position.

The idea behind Shenandoah Telecommunications Co and Rapid Micro Biosystems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.