Correlation Between Gilat Satellite and Ceragon Networks
Can any of the company-specific risk be diversified away by investing in both Gilat Satellite and Ceragon Networks 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 Gilat Satellite and Ceragon Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilat Satellite Networks and Ceragon Networks, you can compare the effects of market volatilities on Gilat Satellite and Ceragon Networks 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 Gilat Satellite with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilat Satellite and Ceragon Networks.
Diversification Opportunities for Gilat Satellite and Ceragon Networks
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gilat and Ceragon is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Satellite Networks and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and Gilat Satellite 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 Gilat Satellite Networks are associated (or correlated) with Ceragon Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceragon Networks has no effect on the direction of Gilat Satellite i.e., Gilat Satellite and Ceragon Networks go up and down completely randomly.
Pair Corralation between Gilat Satellite and Ceragon Networks
Given the investment horizon of 90 days Gilat Satellite is expected to generate 7.39 times less return on investment than Ceragon Networks. But when comparing it to its historical volatility, Gilat Satellite Networks is 1.2 times less risky than Ceragon Networks. It trades about 0.01 of its potential returns per unit of risk. Ceragon Networks is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Ceragon Networks on August 28, 2024 and sell it today you would earn a total of 209.00 from holding Ceragon Networks or generate 106.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilat Satellite Networks vs. Ceragon Networks
Performance |
| Timeline |
| Gilat Satellite Networks |
| Ceragon Networks |
Gilat Satellite and Ceragon Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilat Satellite and Ceragon Networks
The main advantage of trading using opposite Gilat Satellite and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilat Satellite position performs unexpectedly, Ceragon Networks 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 Ceragon Networks will offset losses from the drop in Ceragon Networks' long position.| Gilat Satellite vs. ADTRAN Inc | Gilat Satellite vs. Mynaric AG ADR | Gilat Satellite vs. KVH Industries | Gilat Satellite vs. Telesat Corp |
| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
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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