Correlation Between GIVOT OLAM and Gilat Telecom
Can any of the company-specific risk be diversified away by investing in both GIVOT OLAM and Gilat Telecom 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 GIVOT OLAM and Gilat Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GIVOT OLAM OIL and Gilat Telecom Global, you can compare the effects of market volatilities on GIVOT OLAM and Gilat Telecom 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 GIVOT OLAM with a short position of Gilat Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GIVOT OLAM and Gilat Telecom.
Diversification Opportunities for GIVOT OLAM and Gilat Telecom
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GIVOT and Gilat is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GIVOT OLAM OIL and Gilat Telecom Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilat Telecom Global and GIVOT OLAM 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 GIVOT OLAM OIL are associated (or correlated) with Gilat Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilat Telecom Global has no effect on the direction of GIVOT OLAM i.e., GIVOT OLAM and Gilat Telecom go up and down completely randomly.
Pair Corralation between GIVOT OLAM and Gilat Telecom
Assuming the 90 days trading horizon GIVOT OLAM OIL is expected to under-perform the Gilat Telecom. In addition to that, GIVOT OLAM is 1.9 times more volatile than Gilat Telecom Global. It trades about -0.06 of its total potential returns per unit of risk. Gilat Telecom Global is currently generating about 0.01 per unit of volatility. If you would invest 6,710 in Gilat Telecom Global on August 28, 2024 and sell it today you would lose (10.00) from holding Gilat Telecom Global or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GIVOT OLAM OIL vs. Gilat Telecom Global
Performance |
| Timeline |
| GIVOT OLAM OIL |
| Gilat Telecom Global |
GIVOT OLAM and Gilat Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GIVOT OLAM and Gilat Telecom
The main advantage of trading using opposite GIVOT OLAM and Gilat Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GIVOT OLAM position performs unexpectedly, Gilat Telecom 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 Telecom will offset losses from the drop in Gilat Telecom's long position.The idea behind GIVOT OLAM OIL and Gilat Telecom Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gilat Telecom vs. Bezeq Israeli Telecommunication | Gilat Telecom vs. Partner | Gilat Telecom vs. Satcom Systems | Gilat Telecom vs. Cellcom Israel |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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