Correlation Between Satcom Systems and Compugen
Can any of the company-specific risk be diversified away by investing in both Satcom Systems and Compugen 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 Satcom Systems and Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satcom Systems and Compugen, you can compare the effects of market volatilities on Satcom Systems and Compugen 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 Satcom Systems with a short position of Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satcom Systems and Compugen.
Diversification Opportunities for Satcom Systems and Compugen
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Satcom and Compugen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Satcom Systems and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and Satcom Systems 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 Satcom Systems are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Satcom Systems i.e., Satcom Systems and Compugen go up and down completely randomly.
Pair Corralation between Satcom Systems and Compugen
Assuming the 90 days trading horizon Satcom Systems is expected to generate 0.45 times more return on investment than Compugen. However, Satcom Systems is 2.23 times less risky than Compugen. It trades about -0.19 of its potential returns per unit of risk. Compugen is currently generating about -0.13 per unit of risk. If you would invest 7,610 in Satcom Systems on November 27, 2024 and sell it today you would lose (550.00) from holding Satcom Systems or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Satcom Systems vs. Compugen
Performance |
| Timeline |
| Satcom Systems |
| Compugen |
Satcom Systems and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satcom Systems and Compugen
The main advantage of trading using opposite Satcom Systems and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satcom Systems position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.| Satcom Systems vs. Teuza A Fairchild | Satcom Systems vs. MEITAV INVESTMENTS HOUSE | Satcom Systems vs. Suny Cellular Communication | Satcom Systems vs. IBI Mutual Funds |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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