Correlation Between Comtech Telecommunicatio and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio 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 Comtech Telecommunicatio and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comtech Telecommunications Corp and Gilat Satellite Networks, you can compare the effects of market volatilities on Comtech Telecommunicatio 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 Comtech Telecommunicatio with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Gilat Satellite.
Diversification Opportunities for Comtech Telecommunicatio and Gilat Satellite
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comtech and Gilat is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor 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 Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Gilat Satellite go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Gilat Satellite
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to generate 2.41 times more return on investment than Gilat Satellite. However, Comtech Telecommunicatio is 2.41 times more volatile than Gilat Satellite Networks. It trades about 0.06 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.13 per unit of risk. If you would invest 313.00 in Comtech Telecommunications Corp on August 28, 2024 and sell it today you would earn a total of 43.00 from holding Comtech Telecommunications Corp or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Gilat Satellite Networks
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Gilat Satellite Networks |
Comtech Telecommunicatio and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Gilat Satellite
The main advantage of trading using opposite Comtech Telecommunicatio and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio 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.| Comtech Telecommunicatio vs. Ichor Holdings | Comtech Telecommunicatio vs. Fabrinet | Comtech Telecommunicatio vs. Hello Group | Comtech Telecommunicatio vs. Ultra Clean Holdings |
| Gilat Satellite vs. ADTRAN Inc | Gilat Satellite vs. Mynaric AG ADR | Gilat Satellite vs. KVH Industries | Gilat Satellite vs. Telesat Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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