Correlation Between Wenzhou Kangning and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning 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 Wenzhou Kangning and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wenzhou Kangning Hospital and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Wenzhou Kangning 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 Wenzhou Kangning with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and ORMAT TECHNOLOGIES.
Diversification Opportunities for Wenzhou Kangning and ORMAT TECHNOLOGIES
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wenzhou and ORMAT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Wenzhou Kangning 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 Wenzhou Kangning Hospital 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 Wenzhou Kangning i.e., Wenzhou Kangning and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Wenzhou Kangning and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to generate 1.76 times more return on investment than ORMAT TECHNOLOGIES. However, Wenzhou Kangning is 1.76 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.05 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.03 per unit of risk. If you would invest 83.00 in Wenzhou Kangning Hospital on October 27, 2024 and sell it today you would earn a total of 52.00 from holding Wenzhou Kangning Hospital or generate 62.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wenzhou Kangning Hospital vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Wenzhou Kangning Hospital |
| ORMAT TECHNOLOGIES |
Wenzhou Kangning and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wenzhou Kangning and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Wenzhou Kangning and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning 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.| Wenzhou Kangning vs. EEDUCATION ALBERT AB | Wenzhou Kangning vs. EMBARK EDUCATION LTD | Wenzhou Kangning vs. Firan Technology Group | Wenzhou Kangning vs. Addtech AB |
| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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