Correlation Between Gilat Telecom and Accel Solutions

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

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

Diversification Opportunities for Gilat Telecom and Accel Solutions

-0.85

Correlation Coefficient

Gilat Telecom  Accel Solutions

Pay attention - limited upside

The 3 months correlation between Gilat and Accel is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Telecom Global and Accel Solutions Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Solutions Group and Gilat 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 Gilat Telecom Global are associated (or correlated) with Accel Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Solutions Group has no effect on the direction of Gilat Telecom i.e., Gilat Telecom and Accel Solutions go up and down completely randomly.

Pair Corralation between Gilat Telecom and Accel Solutions

Assuming the 90 days trading horizon Gilat Telecom Global is expected to under-perform the Accel Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Gilat Telecom Global is 1.57 times less risky than Accel Solutions. The stock trades about -0.06 of its potential returns per unit of risk. The Accel Solutions Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  13,430  in Accel Solutions Group on December 30, 2024 and sell it today you would earn a total of  4,590  from holding Accel Solutions Group or generate 34.18% return on investment over 90 days.

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

Gilat Telecom Global  vs.  Accel Solutions Group

Gilat Telecom Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gilat Telecom Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Accel Solutions Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Accel Solutions Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accel Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gilat Telecom and Accel Solutions

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

The idea behind Gilat Telecom Global and Accel Solutions Group 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.