Correlation Between Kandi Technologies and Iridium Communications
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies 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 Kandi Technologies and Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and Iridium Communications, you can compare the effects of market volatilities on Kandi Technologies 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 Kandi Technologies with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Iridium Communications.
Diversification Opportunities for Kandi Technologies and Iridium Communications
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kandi and Iridium is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Iridium Communications go up and down completely randomly.
Pair Corralation between Kandi Technologies and Iridium Communications
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Iridium Communications. In addition to that, Kandi Technologies is 1.69 times more volatile than Iridium Communications. It trades about -0.1 of its total potential returns per unit of risk. Iridium Communications is currently generating about 0.07 per unit of volatility. If you would invest 2,763 in Iridium Communications on September 5, 2024 and sell it today you would earn a total of 301.00 from holding Iridium Communications or generate 10.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kandi Technologies Group vs. Iridium Communications
Performance |
Timeline |
Kandi Technologies |
Iridium Communications |
Kandi Technologies and Iridium Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kandi Technologies and Iridium Communications
The main advantage of trading using opposite Kandi Technologies and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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.Kandi Technologies vs. Ford Motor | Kandi Technologies vs. General Motors | Kandi Technologies vs. Goodyear Tire Rubber | Kandi Technologies vs. Li Auto |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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