Correlation Between Telesat Corp and Gilat Satellite
Can any of the company-specific risk be diversified away by investing in both Telesat Corp and Gilat Satellite 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 Telesat Corp and Gilat Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telesat Corp and Gilat Satellite Networks, you can compare the effects of market volatilities on Telesat Corp and Gilat Satellite 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 Telesat Corp with a short position of Gilat Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telesat Corp and Gilat Satellite.
Diversification Opportunities for Telesat Corp and Gilat Satellite
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telesat and Gilat is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Telesat Corp and Gilat Satellite Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilat Satellite Networks and Telesat Corp 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 Telesat Corp are associated (or correlated) with Gilat Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilat Satellite Networks has no effect on the direction of Telesat Corp i.e., Telesat Corp and Gilat Satellite go up and down completely randomly.
Pair Corralation between Telesat Corp and Gilat Satellite
Given the investment horizon of 90 days Telesat Corp is expected to under-perform the Gilat Satellite. In addition to that, Telesat Corp is 1.63 times more volatile than Gilat Satellite Networks. It trades about -0.01 of its total potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.14 per unit of volatility. If you would invest 670.00 in Gilat Satellite Networks on November 5, 2024 and sell it today you would earn a total of 45.00 from holding Gilat Satellite Networks or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telesat Corp vs. Gilat Satellite Networks
Performance |
| Timeline |
| Telesat Corp |
| Gilat Satellite Networks |
Telesat Corp and Gilat Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telesat Corp and Gilat Satellite
The main advantage of trading using opposite Telesat Corp and Gilat Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telesat Corp position performs unexpectedly, Gilat Satellite 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 Satellite will offset losses from the drop in Gilat Satellite's long position.| Telesat Corp vs. KVH Industries | Telesat Corp vs. Comtech Telecommunications Corp | Telesat Corp vs. Knowles Cor | Telesat Corp vs. Ituran Location and |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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