Correlation Between Minim and Gilat Satellite

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

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

Diversification Opportunities for Minim and Gilat Satellite

-0.34

Correlation Coefficient

Minim  Gilat Satellite

Very good diversification

The 3 months correlation between Minim and Gilat is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Minim Inc 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 Minim 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 Minim Inc 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 Minim i.e., Minim and Gilat Satellite go up and down completely randomly.

Pair Corralation between Minim and Gilat Satellite

Given the investment horizon of 90 days Minim Inc is expected to generate 11.55 times more return on investment than Gilat Satellite. However, Minim is 11.55 times more volatile than Gilat Satellite Networks. It trades about 0.05 of its potential returns per unit of risk. Gilat Satellite Networks is currently generating about 0.01 per unit of risk. If you would invest  360.00  in Minim Inc on September 12, 2024 and sell it today you would lose (99.00) from holding Minim Inc or give up 27.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.73%
Values	Daily Returns

Minim Inc  vs.  Gilat Satellite Networks

Minim Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minim Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Minim is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Gilat Satellite Networks

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gilat Satellite Networks are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Gilat Satellite unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minim and Gilat Satellite

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

The idea behind Minim Inc and Gilat Satellite Networks 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.