Correlation Between Globalstar and Millicom International
Can any of the company-specific risk be diversified away by investing in both Globalstar and Millicom International 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 Globalstar and Millicom International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalstar and Millicom International Cellular, you can compare the effects of market volatilities on Globalstar and Millicom International 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 Globalstar with a short position of Millicom International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalstar and Millicom International.
Diversification Opportunities for Globalstar and Millicom International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globalstar and Millicom is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Globalstar and Millicom International Cellula in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millicom International and Globalstar 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 Globalstar are associated (or correlated) with Millicom International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millicom International has no effect on the direction of Globalstar i.e., Globalstar and Millicom International go up and down completely randomly.
Pair Corralation between Globalstar and Millicom International
Given the investment horizon of 90 days Globalstar is expected to under-perform the Millicom International. In addition to that, Globalstar is 2.27 times more volatile than Millicom International Cellular. It trades about -0.28 of its total potential returns per unit of risk. Millicom International Cellular is currently generating about 0.27 per unit of volatility. If you would invest 2,401 in Millicom International Cellular on November 1, 2024 and sell it today you would earn a total of 320.00 from holding Millicom International Cellular or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globalstar vs. Millicom International Cellula
Performance |
| Timeline |
| Globalstar |
| Millicom International |
Globalstar and Millicom International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalstar and Millicom International
The main advantage of trading using opposite Globalstar and Millicom International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalstar position performs unexpectedly, Millicom International 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 Millicom International will offset losses from the drop in Millicom International's long position.| Globalstar vs. Iridium Communications | Globalstar vs. Lumen Technologies | Globalstar vs. InterDigital | Globalstar vs. Cogent Communications Group |
| Millicom International vs. KT Corporation | Millicom International vs. Telkom Indonesia Tbk | Millicom International vs. SK Telecom Co | Millicom International vs. PLDT Inc ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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