Correlation Between Rapac Communication and Gilat Telecom
Can any of the company-specific risk be diversified away by investing in both Rapac Communication 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 Rapac Communication and Gilat Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rapac Communication Infrastructure and Gilat Telecom Global, you can compare the effects of market volatilities on Rapac Communication 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 Rapac Communication with a short position of Gilat Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rapac Communication and Gilat Telecom.
Diversification Opportunities for Rapac Communication and Gilat Telecom
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rapac and Gilat is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rapac Communication Infrastruc 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 Rapac Communication 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 Rapac Communication Infrastructure 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 Rapac Communication i.e., Rapac Communication and Gilat Telecom go up and down completely randomly.
Pair Corralation between Rapac Communication and Gilat Telecom
Assuming the 90 days trading horizon Rapac Communication Infrastructure is expected to generate 1.05 times more return on investment than Gilat Telecom. However, Rapac Communication is 1.05 times more volatile than Gilat Telecom Global. It trades about 0.47 of its potential returns per unit of risk. Gilat Telecom Global is currently generating about 0.17 per unit of risk. If you would invest 289,200 in Rapac Communication Infrastructure on October 22, 2024 and sell it today you would earn a total of 60,300 from holding Rapac Communication Infrastructure or generate 20.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rapac Communication Infrastruc vs. Gilat Telecom Global
Performance |
| Timeline |
| Rapac Communication |
| Gilat Telecom Global |
Rapac Communication and Gilat Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rapac Communication and Gilat Telecom
The main advantage of trading using opposite Rapac Communication and Gilat Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rapac Communication 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.| Rapac Communication vs. EN Shoham Business | Rapac Communication vs. Accel Solutions Group | Rapac Communication vs. Mivtach Shamir | Rapac Communication vs. Rani Zim Shopping |
| Gilat Telecom vs. Sure Tech Investments LP | Gilat Telecom vs. Sofwave Medical | Gilat Telecom vs. Discount Investment Corp | Gilat Telecom vs. RSL Electronics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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