Correlation Between NURAN WIRELESS and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both NURAN WIRELESS and ORMAT TECHNOLOGIES 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 NURAN WIRELESS and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NURAN WIRELESS INC and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on NURAN WIRELESS and ORMAT TECHNOLOGIES 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 NURAN WIRELESS with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NURAN WIRELESS and ORMAT TECHNOLOGIES.
Diversification Opportunities for NURAN WIRELESS and ORMAT TECHNOLOGIES
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NURAN and ORMAT is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NURAN WIRELESS INC and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and NURAN WIRELESS 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 NURAN WIRELESS INC are associated (or correlated) with ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of NURAN WIRELESS i.e., NURAN WIRELESS and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between NURAN WIRELESS and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon NURAN WIRELESS INC is expected to generate 3.32 times more return on investment than ORMAT TECHNOLOGIES. However, NURAN WIRELESS is 3.32 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.0 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.02 per unit of risk. If you would invest 5.82 in NURAN WIRELESS INC on September 26, 2024 and sell it today you would lose (0.98) from holding NURAN WIRELESS INC or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NURAN WIRELESS INC vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| NURAN WIRELESS INC |
| ORMAT TECHNOLOGIES |
NURAN WIRELESS and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NURAN WIRELESS and ORMAT TECHNOLOGIES
The main advantage of trading using opposite NURAN WIRELESS and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NURAN WIRELESS position performs unexpectedly, ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| NURAN WIRELESS vs. Cisco Systems | NURAN WIRELESS vs. Cisco Systems | NURAN WIRELESS vs. Motorola Solutions | NURAN WIRELESS vs. Nokia |
| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Microsoft | ORMAT TECHNOLOGIES vs. Microsoft |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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