Correlation Between GENERAL and Iridium Communications
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By analyzing existing cross correlation between GENERAL MTRS FINL and Iridium Communications, you can compare the effects of market volatilities on GENERAL 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 GENERAL with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and Iridium Communications.
Diversification Opportunities for GENERAL and Iridium Communications
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between GENERAL and Iridium is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL MTRS FINL and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and GENERAL 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 GENERAL MTRS FINL 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 GENERAL i.e., GENERAL and Iridium Communications go up and down completely randomly.
Pair Corralation between GENERAL and Iridium Communications
Assuming the 90 days trading horizon GENERAL MTRS FINL is expected to under-perform the Iridium Communications. But the bond apears to be less risky and, when comparing its historical volatility, GENERAL MTRS FINL is 26.55 times less risky than Iridium Communications. The bond trades about -0.18 of its potential returns per unit of risk. The Iridium Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,610 in Iridium Communications on September 12, 2024 and sell it today you would earn a total of 419.00 from holding Iridium Communications or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
GENERAL MTRS FINL vs. Iridium Communications
Performance |
| Timeline |
| GENERAL MTRS FINL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Iridium Communications |
GENERAL and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENERAL and Iridium Communications
The main advantage of trading using opposite GENERAL and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL 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.| GENERAL vs. Pinterest | GENERAL vs. Haverty Furniture Companies | GENERAL vs. Tenaris SA ADR | GENERAL vs. Grupo Televisa SAB |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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