Correlation Between Chicago Atlantic and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic 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 Chicago Atlantic and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicago Atlantic BDC, and Iridium Communications, you can compare the effects of market volatilities on Chicago Atlantic 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 Chicago Atlantic with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Iridium Communications.
Diversification Opportunities for Chicago Atlantic and Iridium Communications
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chicago and Iridium is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and Chicago Atlantic 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 Chicago Atlantic BDC, 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 Chicago Atlantic i.e., Chicago Atlantic and Iridium Communications go up and down completely randomly.
Pair Corralation between Chicago Atlantic and Iridium Communications
Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to generate 0.85 times more return on investment than Iridium Communications. However, Chicago Atlantic BDC, is 1.18 times less risky than Iridium Communications. It trades about 0.06 of its potential returns per unit of risk. Iridium Communications is currently generating about -0.05 per unit of risk. If you would invest 737.00 in Chicago Atlantic BDC, on October 4, 2024 and sell it today you would earn a total of 519.00 from holding Chicago Atlantic BDC, or generate 70.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chicago Atlantic BDC, vs. Iridium Communications
Performance |
Timeline |
Chicago Atlantic BDC, |
Iridium Communications |
Chicago Atlantic and Iridium Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chicago Atlantic and Iridium Communications
The main advantage of trading using opposite Chicago Atlantic and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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.Chicago Atlantic vs. NetEase | Chicago Atlantic vs. Vishay Precision Group | Chicago Atlantic vs. Fidus Investment Corp | Chicago Atlantic vs. IPG Photonics |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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