Correlation Between FLOW TRADERS and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Iridium Communications, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Iridium Communications.
Diversification Opportunities for FLOW TRADERS and Iridium Communications
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FLOW and Iridium is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Iridium Communications go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Iridium Communications
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.19 times more return on investment than Iridium Communications. However, FLOW TRADERS is 1.19 times more volatile than Iridium Communications. It trades about 0.27 of its potential returns per unit of risk. Iridium Communications is currently generating about -0.04 per unit of risk. If you would invest 2,118 in FLOW TRADERS LTD on October 13, 2024 and sell it today you would earn a total of 204.00 from holding FLOW TRADERS LTD or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Iridium Communications
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Iridium Communications |
FLOW TRADERS and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Iridium Communications
The main advantage of trading using opposite FLOW TRADERS and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. CN MODERN DAIRY | FLOW TRADERS vs. Thai Beverage Public | FLOW TRADERS vs. Alfa Financial Software | FLOW TRADERS vs. PT Wintermar Offshore |
| Iridium Communications vs. Wyndham Hotels Resorts | Iridium Communications vs. MARKET VECTR RETAIL | Iridium Communications vs. FLOW TRADERS LTD | Iridium Communications vs. Dalata Hotel Group |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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