Correlation Between Gilat Telecom and Oron Group
Can any of the company-specific risk be diversified away by investing in both Gilat Telecom and Oron Group 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 Telecom and Oron Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilat Telecom Global and Oron Group Investments, you can compare the effects of market volatilities on Gilat Telecom and Oron Group 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 Telecom with a short position of Oron Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilat Telecom and Oron Group.
Diversification Opportunities for Gilat Telecom and Oron Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gilat and Oron is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Telecom Global and Oron Group Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oron Group Investments and Gilat Telecom 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 Telecom Global are associated (or correlated) with Oron Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oron Group Investments has no effect on the direction of Gilat Telecom i.e., Gilat Telecom and Oron Group go up and down completely randomly.
Pair Corralation between Gilat Telecom and Oron Group
Assuming the 90 days trading horizon Gilat Telecom Global is expected to under-perform the Oron Group. But the stock apears to be less risky and, when comparing its historical volatility, Gilat Telecom Global is 1.04 times less risky than Oron Group. The stock trades about -0.03 of its potential returns per unit of risk. The Oron Group Investments is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 93,290 in Oron Group Investments on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Oron Group Investments or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilat Telecom Global vs. Oron Group Investments
Performance |
| Timeline |
| Gilat Telecom Global |
| Oron Group Investments |
Gilat Telecom and Oron Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilat Telecom and Oron Group
The main advantage of trading using opposite Gilat Telecom and Oron Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilat Telecom position performs unexpectedly, Oron Group 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 Oron Group will offset losses from the drop in Oron Group's long position.| Gilat Telecom vs. Bezeq Israeli Telecommunication | Gilat Telecom vs. Partner | Gilat Telecom vs. Satcom Systems | Gilat Telecom vs. Cellcom Israel |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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