Correlation Between Iridium Communications and MBANK (BRUSG)
Can any of the company-specific risk be diversified away by investing in both Iridium Communications and MBANK (BRUSG) 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 MBANK (BRUSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iridium Communications and MBANK, you can compare the effects of market volatilities on Iridium Communications and MBANK (BRUSG) 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 MBANK (BRUSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and MBANK (BRUSG).
Diversification Opportunities for Iridium Communications and MBANK (BRUSG)
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iridium and MBANK is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and MBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBANK (BRUSG) 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 MBANK (BRUSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBANK (BRUSG) has no effect on the direction of Iridium Communications i.e., Iridium Communications and MBANK (BRUSG) go up and down completely randomly.
Pair Corralation between Iridium Communications and MBANK (BRUSG)
Assuming the 90 days horizon Iridium Communications is expected to generate 1.3 times more return on investment than MBANK (BRUSG). However, Iridium Communications is 1.3 times more volatile than MBANK. It trades about -0.06 of its potential returns per unit of risk. MBANK is currently generating about -0.1 per unit of risk. If you would invest 2,960 in Iridium Communications on October 11, 2024 and sell it today you would lose (68.00) from holding Iridium Communications or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iridium Communications vs. MBANK
Performance |
| Timeline |
| Iridium Communications |
| MBANK (BRUSG) |
Iridium Communications and MBANK (BRUSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and MBANK (BRUSG)
The main advantage of trading using opposite Iridium Communications and MBANK (BRUSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, MBANK (BRUSG) 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 MBANK (BRUSG) will offset losses from the drop in MBANK (BRUSG)'s long position.| Iridium Communications vs. NURAN WIRELESS INC | Iridium Communications vs. Vienna Insurance Group | Iridium Communications vs. Japan Post Insurance | Iridium Communications vs. KENEDIX OFFICE INV |
| MBANK (BRUSG) vs. Apple Inc | MBANK (BRUSG) vs. Apple Inc | MBANK (BRUSG) vs. Apple Inc | MBANK (BRUSG) vs. Apple 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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