Correlation Between Gilat Telecom and Rapac Communication
Can any of the company-specific risk be diversified away by investing in both Gilat Telecom and Rapac Communication 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 Rapac Communication 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 Rapac Communication Infrastructure, you can compare the effects of market volatilities on Gilat Telecom and Rapac Communication 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 Rapac Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilat Telecom and Rapac Communication.
Diversification Opportunities for Gilat Telecom and Rapac Communication
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gilat and Rapac is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Telecom Global and Rapac Communication Infrastruc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapac Communication 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 Rapac Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapac Communication has no effect on the direction of Gilat Telecom i.e., Gilat Telecom and Rapac Communication go up and down completely randomly.
Pair Corralation between Gilat Telecom and Rapac Communication
Assuming the 90 days trading horizon Gilat Telecom Global is expected to under-perform the Rapac Communication. In addition to that, Gilat Telecom is 1.02 times more volatile than Rapac Communication Infrastructure. It trades about -0.02 of its total potential returns per unit of risk. Rapac Communication Infrastructure is currently generating about 0.42 per unit of volatility. If you would invest 300,900 in Rapac Communication Infrastructure on November 3, 2024 and sell it today you would earn a total of 57,600 from holding Rapac Communication Infrastructure or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilat Telecom Global vs. Rapac Communication Infrastruc
Performance |
| Timeline |
| Gilat Telecom Global |
| Rapac Communication |
Gilat Telecom and Rapac Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilat Telecom and Rapac Communication
The main advantage of trading using opposite Gilat Telecom and Rapac Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilat Telecom position performs unexpectedly, Rapac Communication 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 Rapac Communication will offset losses from the drop in Rapac Communication's long position.| Gilat Telecom vs. Bezeq Israeli Telecommunication | Gilat Telecom vs. Partner | Gilat Telecom vs. Satcom Systems | Gilat Telecom vs. Cellcom Israel |
| Rapac Communication vs. EN Shoham Business | Rapac Communication vs. Accel Solutions Group | Rapac Communication vs. Mivtach Shamir | Rapac Communication vs. Rani Zim Shopping |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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