Correlation Between Gilat Satellite and Matrix
Can any of the company-specific risk be diversified away by investing in both Gilat Satellite and Matrix 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 Gilat Satellite and Matrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilat Satellite Networks and Matrix, you can compare the effects of market volatilities on Gilat Satellite and Matrix 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 Gilat Satellite with a short position of Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilat Satellite and Matrix.
Diversification Opportunities for Gilat Satellite and Matrix
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gilat and Matrix is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Satellite Networks and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix and Gilat Satellite 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 Gilat Satellite Networks are associated (or correlated) with Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of Gilat Satellite i.e., Gilat Satellite and Matrix go up and down completely randomly.
Pair Corralation between Gilat Satellite and Matrix
Assuming the 90 days trading horizon Gilat Satellite Networks is expected to generate 2.37 times more return on investment than Matrix. However, Gilat Satellite is 2.37 times more volatile than Matrix. It trades about 0.0 of its potential returns per unit of risk. Matrix is currently generating about -0.26 per unit of risk. If you would invest 200,500 in Gilat Satellite Networks on January 24, 2024 and sell it today you would lose (1,400) from holding Gilat Satellite Networks or give up 0.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gilat Satellite Networks vs. Matrix
Performance |
Timeline |
Gilat Satellite Networks |
Matrix |
Gilat Satellite and Matrix Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gilat Satellite and Matrix
The main advantage of trading using opposite Gilat Satellite and Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilat Satellite position performs unexpectedly, Matrix 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 Matrix will offset losses from the drop in Matrix's long position.The idea behind Gilat Satellite Networks and Matrix 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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