Correlation Between Deutsche Post and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both Deutsche Post 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 Deutsche Post and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and Gilat Satellite Networks, you can compare the effects of market volatilities on Deutsche Post 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 Deutsche Post with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Gilat Satellite.
Diversification Opportunities for Deutsche Post and Gilat Satellite
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Gilat is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG 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 Deutsche Post 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 Deutsche Post AG 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 Deutsche Post i.e., Deutsche Post and Gilat Satellite go up and down completely randomly.
Pair Corralation between Deutsche Post and Gilat Satellite
Assuming the 90 days horizon Deutsche Post AG is expected to under-perform the Gilat Satellite. But the pink sheet apears to be less risky and, when comparing its historical volatility, Deutsche Post AG is 1.24 times less risky than Gilat Satellite. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Gilat Satellite Networks is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 562.00 in Gilat Satellite Networks on August 31, 2024 and sell it today you would lose (14.00) from holding Gilat Satellite Networks or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.58% |
| Values | Daily Returns |
Deutsche Post AG vs. Gilat Satellite Networks
Performance |
| Timeline |
| Deutsche Post AG |
| Gilat Satellite Networks |
Deutsche Post and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Gilat Satellite
The main advantage of trading using opposite Deutsche Post and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post 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.| Deutsche Post vs. Kuehne Nagel International | Deutsche Post vs. United Parcel Service | Deutsche Post vs. FedEx | Deutsche Post vs. GXO Logistics |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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