Correlation Between Calibre Mining and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both Calibre Mining 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 Calibre Mining and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and Iridium Communications, you can compare the effects of market volatilities on Calibre Mining 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 Calibre Mining with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Iridium Communications.
Diversification Opportunities for Calibre Mining and Iridium Communications
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calibre and Iridium is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and Calibre Mining 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 Calibre Mining Corp 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 Calibre Mining i.e., Calibre Mining and Iridium Communications go up and down completely randomly.
Pair Corralation between Calibre Mining and Iridium Communications
Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.61 times more return on investment than Iridium Communications. However, Calibre Mining is 1.61 times more volatile than Iridium Communications. It trades about 0.0 of its potential returns per unit of risk. Iridium Communications is currently generating about -0.17 per unit of risk. If you would invest 156.00 in Calibre Mining Corp on October 16, 2024 and sell it today you would lose (1.00) from holding Calibre Mining Corp or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calibre Mining Corp vs. Iridium Communications
Performance |
| Timeline |
| Calibre Mining Corp |
| Iridium Communications |
Calibre Mining and Iridium Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calibre Mining and Iridium Communications
The main advantage of trading using opposite Calibre Mining and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining 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.| Calibre Mining vs. SOLSTAD OFFSHORE NK | Calibre Mining vs. Materialise NV | Calibre Mining vs. Performance Food Group | Calibre Mining vs. Solstad Offshore ASA |
| Iridium Communications vs. Calibre Mining Corp | Iridium Communications vs. TYSON FOODS A | Iridium Communications vs. Harmony Gold Mining | Iridium Communications vs. GREENX METALS LTD |
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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