Correlation Between Iridium Communications and Boxlight Corp

Can any of the company-specific risk be diversified away by investing in both Iridium Communications and Boxlight Corp 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 Boxlight Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iridium Communications and Boxlight Corp Class, you can compare the effects of market volatilities on Iridium Communications and Boxlight Corp 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 Boxlight Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and Boxlight Corp.

Diversification Opportunities for Iridium Communications and Boxlight Corp

0.25

Correlation Coefficient

Iridium Communications  Boxlight Corp

Modest diversification

The 3 months correlation between Iridium and Boxlight is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and Boxlight Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxlight Corp Class 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 Boxlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxlight Corp Class has no effect on the direction of Iridium Communications i.e., Iridium Communications and Boxlight Corp go up and down completely randomly.

Pair Corralation between Iridium Communications and Boxlight Corp

Given the investment horizon of 90 days Iridium Communications is expected to generate 1.34 times less return on investment than Boxlight Corp. But when comparing it to its historical volatility, Iridium Communications is 2.27 times less risky than Boxlight Corp. It trades about 0.41 of its potential returns per unit of risk. Boxlight Corp Class is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  53.00  in Boxlight Corp Class on February 17, 2024 and sell it today you would earn a total of  15.60  from holding Boxlight Corp Class or generate 29.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Iridium Communications  vs.  Boxlight Corp Class

Iridium Communications

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iridium Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Iridium Communications is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Boxlight Corp Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boxlight Corp Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Iridium Communications and Boxlight Corp

The main advantage of trading using opposite Iridium Communications and Boxlight Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications position performs unexpectedly, Boxlight Corp 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 Boxlight Corp will offset losses from the drop in Boxlight Corp's long position.

The idea behind Iridium Communications and Boxlight Corp Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.