Correlation Between Mercedes Benz and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Iridium Communications 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 Mercedes Benz and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and Iridium Communications, you can compare the effects of market volatilities on Mercedes Benz and Iridium Communications 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 Mercedes Benz with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Iridium Communications.
Diversification Opportunities for Mercedes Benz and Iridium Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercedes and Iridium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and Mercedes Benz 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 Mercedes Benz Group AG are associated (or correlated) with Iridium Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iridium Communications has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Iridium Communications go up and down completely randomly.
Pair Corralation between Mercedes Benz and Iridium Communications
If you would invest 2,664 in Iridium Communications on November 2, 2024 and sell it today you would earn a total of 216.00 from holding Iridium Communications or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.69% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. Iridium Communications
Performance |
| Timeline |
| Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Iridium Communications |
Mercedes Benz and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and Iridium Communications
The main advantage of trading using opposite Mercedes Benz and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Iridium Communications 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 Iridium Communications will offset losses from the drop in Iridium Communications' long position.| Mercedes Benz vs. STGEORGE MINING LTD | Mercedes Benz vs. Harmony Gold Mining | Mercedes Benz vs. GRIFFIN MINING LTD | Mercedes Benz vs. American Public Education |
| Iridium Communications vs. OFFICE DEPOT | Iridium Communications vs. American Homes 4 | Iridium Communications vs. HAVERTY FURNITURE A | Iridium Communications vs. Haverty Furniture Companies |
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 Stocks Directory module to find actively traded stocks across global markets.
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