Correlation Between Medivie Therapeutic and Gilat Telecom

Can any of the company-specific risk be diversified away by investing in both Medivie Therapeutic 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 Medivie Therapeutic and Gilat Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Medivie Therapeutic and Gilat Telecom Global, you can compare the effects of market volatilities on Medivie Therapeutic 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 Medivie Therapeutic with a short position of Gilat Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medivie Therapeutic and Gilat Telecom.

Diversification Opportunities for Medivie Therapeutic and Gilat Telecom

-0.69

Correlation Coefficient

Medivie Therapeutic  Gilat Telecom

Excellent diversification

The 3 months correlation between Medivie and Gilat is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Medivie Therapeutic 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 Medivie Therapeutic 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 Medivie Therapeutic 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 Medivie Therapeutic i.e., Medivie Therapeutic and Gilat Telecom go up and down completely randomly.

Pair Corralation between Medivie Therapeutic and Gilat Telecom

Assuming the 90 days trading horizon Medivie Therapeutic is expected to under-perform the Gilat Telecom. In addition to that, Medivie Therapeutic is 1.87 times more volatile than Gilat Telecom Global. It trades about -0.08 of its total potential returns per unit of risk. Gilat Telecom Global is currently generating about 0.24 per unit of volatility. If you would invest  5,440  in Gilat Telecom Global on September 25, 2024 and sell it today you would earn a total of  2,070  from holding Gilat Telecom Global or generate 38.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Medivie Therapeutic  vs.  Gilat Telecom Global

Medivie Therapeutic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medivie Therapeutic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Gilat Telecom Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gilat Telecom Global are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gilat Telecom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medivie Therapeutic and Gilat Telecom

The main advantage of trading using opposite Medivie Therapeutic and Gilat Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medivie Therapeutic 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.

The idea behind Medivie Therapeutic and Gilat Telecom Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.