Correlation Between ATRenew and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both ATRenew 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 ATRenew and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRenew Inc DRC and Iridium Communications, you can compare the effects of market volatilities on ATRenew 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 ATRenew with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRenew and Iridium Communications.
Diversification Opportunities for ATRenew and Iridium Communications
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATRenew and Iridium is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and ATRenew 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 ATRenew Inc DRC 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 ATRenew i.e., ATRenew and Iridium Communications go up and down completely randomly.
Pair Corralation between ATRenew and Iridium Communications
Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 2.42 times more return on investment than Iridium Communications. However, ATRenew is 2.42 times more volatile than Iridium Communications. It trades about 0.15 of its potential returns per unit of risk. Iridium Communications is currently generating about 0.04 per unit of risk. If you would invest 256.00 in ATRenew Inc DRC on September 12, 2024 and sell it today you would earn a total of 46.00 from holding ATRenew Inc DRC or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRenew Inc DRC vs. Iridium Communications
Performance |
| Timeline |
| ATRenew Inc DRC |
| Iridium Communications |
ATRenew and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRenew and Iridium Communications
The main advantage of trading using opposite ATRenew and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew 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.The idea behind ATRenew Inc DRC and Iridium Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Iridium Communications vs. IHS Holding | Iridium Communications vs. Cogent Communications Group | Iridium Communications vs. IDT Corporation | Iridium Communications vs. Cable One |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |