Correlation Between First International and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both First International 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 First International and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and Gilat Satellite Networks, you can compare the effects of market volatilities on First International 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 First International with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Gilat Satellite.
Diversification Opportunities for First International and Gilat Satellite
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Gilat is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank 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 First International 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 First International Bank 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 First International i.e., First International and Gilat Satellite go up and down completely randomly.
Pair Corralation between First International and Gilat Satellite
Assuming the 90 days trading horizon First International is expected to generate 1.37 times less return on investment than Gilat Satellite. But when comparing it to its historical volatility, First International Bank is 2.16 times less risky than Gilat Satellite. It trades about 0.51 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 213,300 in Gilat Satellite Networks on October 21, 2024 and sell it today you would earn a total of 25,700 from holding Gilat Satellite Networks or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. Gilat Satellite Networks
Performance |
| Timeline |
| First International Bank |
| Gilat Satellite Networks |
First International and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Gilat Satellite
The main advantage of trading using opposite First International and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International 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.| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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