Correlation Between Computer Direct and Gilat Telecom

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

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

Diversification Opportunities for Computer Direct and Gilat Telecom

0.84

Correlation Coefficient

Computer Direct  Gilat Telecom

Very poor diversification

The 3 months correlation between Computer and Gilat is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Computer Direct and Gilat Telecom Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilat Telecom Global and Computer Direct 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 Computer Direct are associated (or correlated) with Gilat Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilat Telecom Global has no effect on the direction of Computer Direct i.e., Computer Direct and Gilat Telecom go up and down completely randomly.

Pair Corralation between Computer Direct and Gilat Telecom

Assuming the 90 days trading horizon Computer Direct is expected to generate 1.93 times less return on investment than Gilat Telecom. In addition to that, Computer Direct is 1.0 times more volatile than Gilat Telecom Global. It trades about 0.13 of its total potential returns per unit of risk. Gilat Telecom Global is currently generating about 0.25 per unit of volatility. If you would invest  7,440  in Gilat Telecom Global on May 17, 2025 and sell it today you would earn a total of  2,570  from holding Gilat Telecom Global or generate 34.54% return on investment over 90 days.

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

Computer Direct  vs.  Gilat Telecom Global

Computer Direct

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Direct are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Computer Direct sustained solid returns over the last few months and may actually be approaching a breakup point.

Gilat Telecom Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gilat Telecom Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gilat Telecom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Computer Direct and Gilat Telecom

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

The idea behind Computer Direct and Gilat Telecom Global 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.