Correlation Between G1 Secure and Satcom Systems

Can any of the company-specific risk be diversified away by investing in both G1 Secure and Satcom Systems 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 G1 Secure and Satcom Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G1 Secure Solutions and Satcom Systems, you can compare the effects of market volatilities on G1 Secure and Satcom Systems 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 G1 Secure with a short position of Satcom Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of G1 Secure and Satcom Systems.

Diversification Opportunities for G1 Secure and Satcom Systems

0.92

Correlation Coefficient

G1 Secure  Satcom Systems

Almost no diversification

The 3 months correlation between GOSS and Satcom is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding G1 Secure Solutions and Satcom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satcom Systems and G1 Secure 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 G1 Secure Solutions are associated (or correlated) with Satcom Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satcom Systems has no effect on the direction of G1 Secure i.e., G1 Secure and Satcom Systems go up and down completely randomly.

Pair Corralation between G1 Secure and Satcom Systems

Assuming the 90 days trading horizon G1 Secure is expected to generate 1.38 times less return on investment than Satcom Systems. In addition to that, G1 Secure is 1.48 times more volatile than Satcom Systems. It trades about 0.13 of its total potential returns per unit of risk. Satcom Systems is currently generating about 0.26 per unit of volatility. If you would invest  7,530  in Satcom Systems on April 23, 2025 and sell it today you would earn a total of  2,570  from holding Satcom Systems or generate 34.13% return on investment over 90 days.

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

G1 Secure Solutions  vs.  Satcom Systems

G1 Secure Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G1 Secure Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G1 Secure sustained solid returns over the last few months and may actually be approaching a breakup point.

Satcom Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satcom Systems are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Satcom Systems sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G1 Secure and Satcom Systems

The main advantage of trading using opposite G1 Secure and Satcom Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G1 Secure position performs unexpectedly, Satcom Systems 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 Satcom Systems will offset losses from the drop in Satcom Systems' long position.

The idea behind G1 Secure Solutions and Satcom Systems 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.