Correlation Between Iridium Communications and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Iridium Communications and CITY OFFICE 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 Iridium Communications and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iridium Communications and CITY OFFICE REIT, you can compare the effects of market volatilities on Iridium Communications and CITY OFFICE 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 Iridium Communications with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and CITY OFFICE.
Diversification Opportunities for Iridium Communications and CITY OFFICE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iridium and CITY is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT and Iridium Communications 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 Iridium Communications are associated (or correlated) with CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of Iridium Communications i.e., Iridium Communications and CITY OFFICE go up and down completely randomly.
Pair Corralation between Iridium Communications and CITY OFFICE
Assuming the 90 days horizon Iridium Communications is expected to under-perform the CITY OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, Iridium Communications is 1.49 times less risky than CITY OFFICE. The stock trades about -0.04 of its potential returns per unit of risk. The CITY OFFICE REIT is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 525.00 in CITY OFFICE REIT on October 13, 2024 and sell it today you would lose (5.00) from holding CITY OFFICE REIT or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iridium Communications vs. CITY OFFICE REIT
Performance |
| Timeline |
| Iridium Communications |
| CITY OFFICE REIT |
Iridium Communications and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and CITY OFFICE
The main advantage of trading using opposite Iridium Communications and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| Iridium Communications vs. Wyndham Hotels Resorts | Iridium Communications vs. MARKET VECTR RETAIL | Iridium Communications vs. FLOW TRADERS LTD | Iridium Communications vs. Dalata Hotel Group |
| CITY OFFICE vs. T MOBILE US | CITY OFFICE vs. Cairo Communication SpA | CITY OFFICE vs. Iridium Communications | CITY OFFICE vs. ecotel communication ag |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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