Correlation Between Wireless Telecom and SatixFy Communications

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

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

Diversification Opportunities for Wireless Telecom and SatixFy Communications

0.33

Correlation Coefficient

Wireless Telecom  SatixFy Communications

Weak diversification

The 3 months correlation between Wireless and SatixFy is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Telecom Group and SatixFy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SatixFy Communications and Wireless Telecom 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 Wireless Telecom Group are associated (or correlated) with SatixFy Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SatixFy Communications has no effect on the direction of Wireless Telecom i.e., Wireless Telecom and SatixFy Communications go up and down completely randomly.

Pair Corralation between Wireless Telecom and SatixFy Communications

Considering the 90-day investment horizon Wireless Telecom Group is expected to generate 0.8 times more return on investment than SatixFy Communications. However, Wireless Telecom Group is 1.24 times less risky than SatixFy Communications. It trades about 0.09 of its potential returns per unit of risk. SatixFy Communications is currently generating about 0.06 per unit of risk. If you would invest  178.00  in Wireless Telecom Group on August 31, 2024 and sell it today you would earn a total of  33.00  from holding Wireless Telecom Group or generate 18.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	13.2%
Values	Daily Returns

Wireless Telecom Group  vs.  SatixFy Communications

Wireless Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wireless Telecom Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Wireless Telecom is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SatixFy Communications

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SatixFy Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SatixFy Communications showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wireless Telecom and SatixFy Communications

The main advantage of trading using opposite Wireless Telecom and SatixFy Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Telecom position performs unexpectedly, SatixFy Communications 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 SatixFy Communications will offset losses from the drop in SatixFy Communications' long position.

The idea behind Wireless Telecom Group and SatixFy Communications 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.