Correlation Between Vodafone Group and Shenandoah Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Vodafone Group 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 Vodafone Group and Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vodafone Group PLC and Shenandoah Telecommunications Co, you can compare the effects of market volatilities on Vodafone Group 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 Vodafone Group with a short position of Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Shenandoah Telecommunicatio.

Diversification Opportunities for Vodafone Group and Shenandoah Telecommunicatio

0.82

Correlation Coefficient

Vodafone Group  Shenandoah Telecommunicatio

Very poor diversification

The 3 months correlation between Vodafone and Shenandoah is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and Vodafone Group 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 Vodafone Group PLC 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 Vodafone Group i.e., Vodafone Group and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between Vodafone Group and Shenandoah Telecommunicatio

Considering the 90-day investment horizon Vodafone Group PLC is expected to generate 0.63 times more return on investment than Shenandoah Telecommunicatio. However, Vodafone Group PLC is 1.59 times less risky than Shenandoah Telecommunicatio. It trades about 0.2 of its potential returns per unit of risk. Shenandoah Telecommunications Co is currently generating about 0.08 per unit of risk. If you would invest  917.00  in Vodafone Group PLC on May 7, 2025 and sell it today you would earn a total of  187.00  from holding Vodafone Group PLC or generate 20.39% return on investment over 90 days.

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

Vodafone Group PLC  vs.  Shenandoah Telecommunications

Vodafone Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Vodafone Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shenandoah Telecommunicatio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenandoah Telecommunications Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Shenandoah Telecommunicatio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vodafone Group and Shenandoah Telecommunicatio

The main advantage of trading using opposite Vodafone Group and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group 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.

The idea behind Vodafone Group PLC and Shenandoah Telecommunications Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.