Correlation Between Gilat Telecom and MediPress Health

Can any of the company-specific risk be diversified away by investing in both Gilat Telecom and MediPress Health 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 MediPress Health 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 MediPress Health Limited Partnership, you can compare the effects of market volatilities on Gilat Telecom and MediPress Health 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 MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilat Telecom and MediPress Health.

Diversification Opportunities for Gilat Telecom and MediPress Health

0.67

Correlation Coefficient

Gilat Telecom  MediPress Health

Poor diversification

The 3 months correlation between Gilat and MediPress is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gilat Telecom Global and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim 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 MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Gilat Telecom i.e., Gilat Telecom and MediPress Health go up and down completely randomly.

Pair Corralation between Gilat Telecom and MediPress Health

Assuming the 90 days trading horizon Gilat Telecom Global is expected to under-perform the MediPress Health. But the stock apears to be less risky and, when comparing its historical volatility, Gilat Telecom Global is 1.18 times less risky than MediPress Health. The stock trades about -0.12 of its potential returns per unit of risk. The MediPress Health Limited Partnership is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  7,160  in MediPress Health Limited Partnership on December 31, 2024 and sell it today you would lose (340.00) from holding MediPress Health Limited Partnership or give up 4.75% of portfolio value over 90 days.

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

Gilat Telecom Global  vs.  MediPress Health Limited Partn

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MediPress Health Lim

Risk-Adjusted Performance

Very Weak

Over the last 90 days MediPress Health Limited Partnership has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MediPress Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gilat Telecom and MediPress Health

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

The idea behind Gilat Telecom Global and MediPress Health Limited Partnership 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.