Correlation Between Iridium Communications and Vestas Wind
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By analyzing existing cross correlation between Iridium Communications and Vestas Wind Systems, you can compare the effects of market volatilities on Iridium Communications and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and Vestas Wind.
Diversification Opportunities for Iridium Communications and Vestas Wind
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iridium and Vestas is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Iridium Communications i.e., Iridium Communications and Vestas Wind go up and down completely randomly.
Pair Corralation between Iridium Communications and Vestas Wind
Assuming the 90 days horizon Iridium Communications is expected to generate 1.03 times more return on investment than Vestas Wind. However, Iridium Communications is 1.03 times more volatile than Vestas Wind Systems. It trades about -0.02 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.05 per unit of risk. If you would invest 4,573 in Iridium Communications on September 13, 2024 and sell it today you would lose (1,599) from holding Iridium Communications or give up 34.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iridium Communications vs. Vestas Wind Systems
Performance |
| Timeline |
| Iridium Communications |
| Vestas Wind Systems |
Iridium Communications and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and Vestas Wind
The main advantage of trading using opposite Iridium Communications and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Iridium Communications vs. Superior Plus Corp | Iridium Communications vs. SIVERS SEMICONDUCTORS AB | Iridium Communications vs. Norsk Hydro ASA | Iridium Communications vs. Reliance Steel Aluminum |
| Vestas Wind vs. Iridium Communications | Vestas Wind vs. WillScot Mobile Mini | Vestas Wind vs. Consolidated Communications Holdings | Vestas Wind vs. Gamma Communications plc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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