Correlation Between Alrov Properties and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both Alrov Properties 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 Alrov Properties and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alrov Properties Lodgings and Gilat Satellite Networks, you can compare the effects of market volatilities on Alrov Properties 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 Alrov Properties with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alrov Properties and Gilat Satellite.
Diversification Opportunities for Alrov Properties and Gilat Satellite
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alrov and Gilat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alrov Properties Lodgings 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 Alrov Properties 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 Alrov Properties Lodgings 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 Alrov Properties i.e., Alrov Properties and Gilat Satellite go up and down completely randomly.
Pair Corralation between Alrov Properties and Gilat Satellite
Assuming the 90 days trading horizon Alrov Properties is expected to generate 1.99 times less return on investment than Gilat Satellite. But when comparing it to its historical volatility, Alrov Properties Lodgings is 1.12 times less risky than Gilat Satellite. It trades about 0.02 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 199,800 in Gilat Satellite Networks on November 2, 2024 and sell it today you would earn a total of 53,500 from holding Gilat Satellite Networks or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Alrov Properties Lodgings vs. Gilat Satellite Networks
Performance |
| Timeline |
| Alrov Properties Lodgings |
| Gilat Satellite Networks |
Alrov Properties and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alrov Properties and Gilat Satellite
The main advantage of trading using opposite Alrov Properties and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alrov Properties 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.| Alrov Properties vs. Melisron | Alrov Properties vs. Fattal 1998 Holdings | Alrov Properties vs. Azrieli Group | Alrov Properties vs. Clal Insurance Enterprises |
| Gilat Satellite vs. Elbit Systems | Gilat Satellite vs. Tower Semiconductor | Gilat Satellite vs. Kamada | Gilat Satellite vs. Delek Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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