Correlation Between Abra Information and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both Abra Information 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 Abra Information and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abra Information Technologies and Gilat Satellite Networks, you can compare the effects of market volatilities on Abra Information 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 Abra Information with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abra Information and Gilat Satellite.
Diversification Opportunities for Abra Information and Gilat Satellite
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abra and Gilat is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Abra Information Technologies 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 Abra Information 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 Abra Information Technologies 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 Abra Information i.e., Abra Information and Gilat Satellite go up and down completely randomly.
Pair Corralation between Abra Information and Gilat Satellite
Assuming the 90 days trading horizon Abra Information Technologies is expected to generate 0.84 times more return on investment than Gilat Satellite. However, Abra Information Technologies is 1.2 times less risky than Gilat Satellite. It trades about 0.39 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.32 per unit of risk. If you would invest 29,600 in Abra Information Technologies on October 21, 2024 and sell it today you would earn a total of 3,680 from holding Abra Information Technologies or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abra Information Technologies vs. Gilat Satellite Networks
Performance |
| Timeline |
| Abra Information Tec |
| Gilat Satellite Networks |
Abra Information and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abra Information and Gilat Satellite
The main advantage of trading using opposite Abra Information and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abra Information 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.| Abra Information vs. Bank Leumi Le Israel | Abra Information vs. Mizrahi Tefahot | Abra Information vs. Israel Discount Bank | Abra Information vs. Migdal Insurance |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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