Correlation Between Sure Tech and Gilat Telecom
Can any of the company-specific risk be diversified away by investing in both Sure Tech 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 Sure Tech and Gilat Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sure Tech Investments LP and Gilat Telecom Global, you can compare the effects of market volatilities on Sure Tech 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 Sure Tech with a short position of Gilat Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Gilat Telecom.
Diversification Opportunities for Sure Tech and Gilat Telecom
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sure and Gilat is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP 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 Sure Tech 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 Sure Tech Investments LP 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 Sure Tech i.e., Sure Tech and Gilat Telecom go up and down completely randomly.
Pair Corralation between Sure Tech and Gilat Telecom
Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the Gilat Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 1.78 times less risky than Gilat Telecom. The stock trades about -0.14 of its potential returns per unit of risk. The Gilat Telecom Global is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 8,000 in Gilat Telecom Global on November 3, 2024 and sell it today you would lose (120.00) from holding Gilat Telecom Global or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sure Tech Investments LP vs. Gilat Telecom Global
Performance |
| Timeline |
| Sure Tech Investments |
| Gilat Telecom Global |
Sure Tech and Gilat Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sure Tech and Gilat Telecom
The main advantage of trading using opposite Sure Tech and Gilat Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech 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.| Sure Tech vs. PennantPark Floating Rate | Sure Tech vs. Altshuler Shaham Financial | Sure Tech vs. Generation Capital | Sure Tech vs. Meitav Dash Investments |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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