Correlation Between Nice and Gilat Satellite

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Can any of the company-specific risk be diversified away by investing in both Nice and Gilat Satellite 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 Nice and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice and Gilat Satellite Networks, you can compare the effects of market volatilities on Nice and Gilat Satellite 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 Nice with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Gilat Satellite.

Diversification Opportunities for Nice and Gilat Satellite

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Nice and Gilat is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nice and Gilat Satellite Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilat Satellite Networks and Nice 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 Nice are associated (or correlated) with Gilat Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilat Satellite Networks has no effect on the direction of Nice i.e., Nice and Gilat Satellite go up and down completely randomly.

Pair Corralation between Nice and Gilat Satellite

Assuming the 90 days trading horizon Nice is expected to generate 1.37 times more return on investment than Gilat Satellite. However, Nice is 1.37 times more volatile than Gilat Satellite Networks. It trades about 0.21 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about -0.34 per unit of risk. If you would invest  8,778,000  in Nice on December 29, 2023 and sell it today you would earn a total of  682,000  from holding Nice or generate 7.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nice  vs.  Gilat Satellite Networks

 Performance 
       Timeline  
Nice 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Nice are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nice sustained solid returns over the last few months and may actually be approaching a breakup point.
Gilat Satellite Networks 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Gilat Satellite Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Nice and Gilat Satellite Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nice and Gilat Satellite

The main advantage of trading using opposite Nice and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, Gilat Satellite 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 Gilat Satellite will offset losses from the drop in Gilat Satellite's long position.
The idea behind Nice and Gilat Satellite Networks 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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