Correlation Between Iridium Communications and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Iridium Communications and Kandi Technologies 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 Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iridium Communications and Kandi Technologies Group, you can compare the effects of market volatilities on Iridium Communications and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and Kandi Technologies.
Diversification Opportunities for Iridium Communications and Kandi Technologies
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iridium and Kandi is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Iridium Communications i.e., Iridium Communications and Kandi Technologies go up and down completely randomly.
Pair Corralation between Iridium Communications and Kandi Technologies
Given the investment horizon of 90 days Iridium Communications is expected to generate 0.75 times more return on investment than Kandi Technologies. However, Iridium Communications is 1.34 times less risky than Kandi Technologies. It trades about -0.03 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.1 per unit of risk. If you would invest 3,725 in Iridium Communications on August 24, 2024 and sell it today you would lose (831.00) from holding Iridium Communications or give up 22.31% 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. Kandi Technologies Group
Performance |
| Timeline |
| Iridium Communications |
| Kandi Technologies |
Iridium Communications and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and Kandi Technologies
The main advantage of trading using opposite Iridium Communications and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.| Iridium Communications vs. IHS Holding | Iridium Communications vs. Cogent Communications Group | Iridium Communications vs. IDT Corporation | Iridium Communications vs. Cable One |
| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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