Correlation Between Gilat Satellite and Impinj

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

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

Diversification Opportunities for Gilat Satellite and Impinj

-0.82

Correlation Coefficient

Gilat Satellite  Impinj

Pay attention - limited upside

The 3 months correlation between Gilat and Impinj is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Satellite Networks and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc and Gilat Satellite 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 Gilat Satellite Networks are associated (or correlated) with Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of Gilat Satellite i.e., Gilat Satellite and Impinj go up and down completely randomly.

Pair Corralation between Gilat Satellite and Impinj

Given the investment horizon of 90 days Gilat Satellite is expected to generate 2.58 times less return on investment than Impinj. But when comparing it to its historical volatility, Gilat Satellite Networks is 1.75 times less risky than Impinj. It trades about 0.02 of its potential returns per unit of risk. Impinj Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  12,756  in Impinj Inc on October 5, 2024 and sell it today you would earn a total of  1,919  from holding Impinj Inc or generate 15.04% return on investment over 90 days.

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

Gilat Satellite Networks  vs.  Impinj Inc

Gilat Satellite Networks

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gilat Satellite Networks are ranked lower than 10 (%) 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.

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Gilat Satellite and Impinj

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

The idea behind Gilat Satellite Networks and Impinj Inc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.