Correlation Between Opal Balance and Gilat Telecom
Can any of the company-specific risk be diversified away by investing in both Opal Balance 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 Opal Balance and Gilat Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opal Balance and Gilat Telecom Global, you can compare the effects of market volatilities on Opal Balance 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 Opal Balance with a short position of Gilat Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opal Balance and Gilat Telecom.
Diversification Opportunities for Opal Balance and Gilat Telecom
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Opal and Gilat is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Opal Balance 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 Opal Balance 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 Opal Balance 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 Opal Balance i.e., Opal Balance and Gilat Telecom go up and down completely randomly.
Pair Corralation between Opal Balance and Gilat Telecom
Assuming the 90 days trading horizon Opal Balance is expected to generate 1.13 times more return on investment than Gilat Telecom. However, Opal Balance is 1.13 times more volatile than Gilat Telecom Global. It trades about 0.24 of its potential returns per unit of risk. Gilat Telecom Global is currently generating about 0.01 per unit of risk. If you would invest 17,790 in Opal Balance on August 28, 2024 and sell it today you would earn a total of 1,710 from holding Opal Balance or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opal Balance vs. Gilat Telecom Global
Performance |
| Timeline |
| Opal Balance |
| Gilat Telecom Global |
Opal Balance and Gilat Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opal Balance and Gilat Telecom
The main advantage of trading using opposite Opal Balance and Gilat Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opal Balance 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.| Opal Balance vs. Bank Hapoalim | Opal Balance vs. Israel Discount Bank | Opal Balance vs. Bezeq Israeli Telecommunication | Opal Balance vs. Elbit Systems |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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