Correlation Between ScanTech and Iridium Communications

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

By analyzing existing cross correlation between ScanTech AI Systems and Iridium Communications, you can compare the effects of market volatilities on ScanTech 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 ScanTech with a short position of Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanTech and Iridium Communications.

Diversification Opportunities for ScanTech and Iridium Communications

0.12

Correlation Coefficient

ScanTech  Iridium Communications

Average diversification

The 3 months correlation between ScanTech and Iridium is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ScanTech AI Systems and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications and ScanTech 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 ScanTech AI Systems 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 ScanTech i.e., ScanTech and Iridium Communications go up and down completely randomly.

Pair Corralation between ScanTech and Iridium Communications

Given the investment horizon of 90 days ScanTech AI Systems is expected to under-perform the Iridium Communications. In addition to that, ScanTech is 3.68 times more volatile than Iridium Communications. It trades about -0.04 of its total potential returns per unit of risk. Iridium Communications is currently generating about -0.01 per unit of volatility. If you would invest  2,610  in Iridium Communications on May 27, 2025 and sell it today you would lose (127.00) from holding Iridium Communications or give up 4.87% of portfolio value over 90 days.

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

ScanTech AI Systems  vs.  Iridium Communications

ScanTech AI Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Iridium Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Iridium Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Iridium Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ScanTech and Iridium Communications

The main advantage of trading using opposite ScanTech and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanTech 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.

The idea behind ScanTech AI Systems and Iridium Communications 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.