Correlation Between Iridium Communications and Microbot Medical
Can any of the company-specific risk be diversified away by investing in both Iridium Communications and Microbot Medical 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 Iridium Communications and Microbot Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iridium Communications and Microbot Medical, you can compare the effects of market volatilities on Iridium Communications and Microbot Medical 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 Iridium Communications with a short position of Microbot Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and Microbot Medical.
Diversification Opportunities for Iridium Communications and Microbot Medical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iridium and Microbot is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical and Iridium Communications 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 Iridium Communications are associated (or correlated) with Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Iridium Communications i.e., Iridium Communications and Microbot Medical go up and down completely randomly.
Pair Corralation between Iridium Communications and Microbot Medical
Given the investment horizon of 90 days Iridium Communications is expected to generate 0.51 times more return on investment than Microbot Medical. However, Iridium Communications is 1.95 times less risky than Microbot Medical. It trades about 0.09 of its potential returns per unit of risk. Microbot Medical is currently generating about -0.15 per unit of risk. If you would invest 2,838 in Iridium Communications on December 4, 2024 and sell it today you would earn a total of 166.00 from holding Iridium Communications or generate 5.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Iridium Communications vs. Microbot Medical
Performance |
Timeline |
Iridium Communications |
Microbot Medical |
Iridium Communications and Microbot Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iridium Communications and Microbot Medical
The main advantage of trading using opposite Iridium Communications and Microbot Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, Microbot Medical 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 Microbot Medical will offset losses from the drop in Microbot Medical's long position.Iridium Communications vs. IHS Holding | Iridium Communications vs. Cogent Communications Group | Iridium Communications vs. IDT Corporation | Iridium Communications vs. Cable One |
Microbot Medical vs. Intuitive Surgical | Microbot Medical vs. Innerscope Advertising Agency | Microbot Medical vs. Predictive Oncology | Microbot Medical vs. STAAR Surgical |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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