Correlation Between KINDER and Iridium Communications
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By analyzing existing cross correlation between KINDER MORGAN INC and Iridium Communications, you can compare the effects of market volatilities on KINDER 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 KINDER with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINDER and Iridium Communications.
Diversification Opportunities for KINDER and Iridium Communications
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KINDER and Iridium is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KINDER MORGAN INC and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and KINDER 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 KINDER MORGAN INC 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 KINDER i.e., KINDER and Iridium Communications go up and down completely randomly.
Pair Corralation between KINDER and Iridium Communications
Assuming the 90 days trading horizon KINDER is expected to generate 7.86 times less return on investment than Iridium Communications. But when comparing it to its historical volatility, KINDER MORGAN INC is 2.37 times less risky than Iridium Communications. It trades about 0.01 of its potential returns per unit of risk. Iridium Communications is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,933 in Iridium Communications on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Iridium Communications or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINDER MORGAN INC vs. Iridium Communications
Performance |
| Timeline |
| KINDER MORGAN INC |
| Iridium Communications |
KINDER and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINDER and Iridium Communications
The main advantage of trading using opposite KINDER and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINDER 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.| KINDER vs. Iridium Communications | KINDER vs. East Africa Metals | KINDER vs. Barrick Gold Corp | KINDER vs. Uranium Energy Corp |
| Iridium Communications vs. T Mobile | Iridium Communications vs. Comcast Corp | Iridium Communications vs. Lumen Technologies | Iridium Communications vs. Charter Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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