Correlation Between Gaztransport Technigaz and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz 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 Gaztransport Technigaz and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Gaztransport Technigaz 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 Gaztransport Technigaz with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and ORMAT TECHNOLOGIES.
Diversification Opportunities for Gaztransport Technigaz and ORMAT TECHNOLOGIES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gaztransport and ORMAT is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Gaztransport Technigaz 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 Gaztransport Technigaz SA 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 Gaztransport Technigaz i.e., Gaztransport Technigaz and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.96 times more return on investment than ORMAT TECHNOLOGIES. However, Gaztransport Technigaz SA is 1.04 times less risky than ORMAT TECHNOLOGIES. It trades about 0.11 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.09 per unit of risk. If you would invest 12,861 in Gaztransport Technigaz SA on October 24, 2024 and sell it today you would earn a total of 1,559 from holding Gaztransport Technigaz SA or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Gaztransport Technigaz |
| ORMAT TECHNOLOGIES |
Gaztransport Technigaz and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Gaztransport Technigaz and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz 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.| Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Baker Hughes Co | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. NOV Inc |
| ORMAT TECHNOLOGIES vs. KOBE STEEL LTD | ORMAT TECHNOLOGIES vs. Gaztransport Technigaz SA | ORMAT TECHNOLOGIES vs. Tianjin Capital Environmental | ORMAT TECHNOLOGIES vs. DICKS Sporting Goods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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