Correlation Between Nice and Gilat Satellite
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nice vs. Gilat Satellite Networks
Performance |
Timeline |
Nice |
Gilat Satellite Networks |
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.Nice vs. Hiron Trade Investments Industrial | Nice vs. Internet Gold | Nice vs. Isras Investment | Nice vs. Arad Investment Industrial |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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