Correlation Between UNILEVER and Iridium Communications
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By analyzing existing cross correlation between UNILEVER CAP P and Iridium Communications, you can compare the effects of market volatilities on UNILEVER 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 UNILEVER with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNILEVER and Iridium Communications.
Diversification Opportunities for UNILEVER and Iridium Communications
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNILEVER and Iridium is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding UNILEVER CAP P and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and UNILEVER 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 UNILEVER CAP P 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 UNILEVER i.e., UNILEVER and Iridium Communications go up and down completely randomly.
Pair Corralation between UNILEVER and Iridium Communications
Assuming the 90 days trading horizon UNILEVER CAP P is expected to under-perform the Iridium Communications. But the bond apears to be less risky and, when comparing its historical volatility, UNILEVER CAP P is 2.74 times less risky than Iridium Communications. The bond trades about -0.39 of its potential returns per unit of risk. The Iridium Communications is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,975 in Iridium Communications on August 29, 2024 and sell it today you would lose (64.00) from holding Iridium Communications or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
UNILEVER CAP P vs. Iridium Communications
Performance |
| Timeline |
| UNILEVER CAP P |
| Iridium Communications |
UNILEVER and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNILEVER and Iridium Communications
The main advantage of trading using opposite UNILEVER and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNILEVER 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.| UNILEVER vs. Iridium Communications | UNILEVER vs. Magna International | UNILEVER vs. FDG Electric Vehicles | UNILEVER vs. PACCAR Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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