Correlation Between Iridium Communications and GENERAL
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By analyzing existing cross correlation between Iridium Communications and GENERAL MTRS FINL, you can compare the effects of market volatilities on Iridium Communications and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and GENERAL.
Diversification Opportunities for Iridium Communications and GENERAL
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Iridium and GENERAL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and GENERAL MTRS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL MTRS FINL 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL MTRS FINL has no effect on the direction of Iridium Communications i.e., Iridium Communications and GENERAL go up and down completely randomly.
Pair Corralation between Iridium Communications and GENERAL
Given the investment horizon of 90 days Iridium Communications is expected to generate 4.56 times more return on investment than GENERAL. However, Iridium Communications is 4.56 times more volatile than GENERAL MTRS FINL. It trades about 0.05 of its potential returns per unit of risk. GENERAL MTRS FINL is currently generating about 0.07 per unit of risk. If you would invest 2,978 in Iridium Communications on September 13, 2024 and sell it today you would earn a total of 65.00 from holding Iridium Communications or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iridium Communications vs. GENERAL MTRS FINL
Performance |
| Timeline |
| Iridium Communications |
| GENERAL MTRS FINL |
Iridium Communications and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and GENERAL
The main advantage of trading using opposite Iridium Communications and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Iridium Communications vs. IHS Holding | Iridium Communications vs. Cogent Communications Group | Iridium Communications vs. IDT Corporation | Iridium Communications vs. Cable One |
| GENERAL vs. AEP TEX INC | GENERAL vs. US BANK NATIONAL | GENERAL vs. Recursion Pharmaceuticals | GENERAL vs. SoundHound AI |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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