Correlation Between Amanet Management and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Amanet Management 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 Amanet Management and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amanet Management Systems and Ormat Technologies, you can compare the effects of market volatilities on Amanet Management 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 Amanet Management with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amanet Management and Ormat Technologies.
Diversification Opportunities for Amanet Management and Ormat Technologies
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amanet and Ormat is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amanet Management Systems and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Amanet Management 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 Amanet Management Systems 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 Amanet Management i.e., Amanet Management and Ormat Technologies go up and down completely randomly.
Pair Corralation between Amanet Management and Ormat Technologies
Assuming the 90 days trading horizon Amanet Management Systems is expected to generate 1.15 times more return on investment than Ormat Technologies. However, Amanet Management is 1.15 times more volatile than Ormat Technologies. It trades about 0.14 of its potential returns per unit of risk. Ormat Technologies is currently generating about -0.11 per unit of risk. If you would invest 155,100 in Amanet Management Systems on August 29, 2024 and sell it today you would earn a total of 5,600 from holding Amanet Management Systems or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amanet Management Systems vs. Ormat Technologies
Performance |
| Timeline |
| Amanet Management Systems |
| Ormat Technologies |
Amanet Management and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amanet Management and Ormat Technologies
The main advantage of trading using opposite Amanet Management and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanet Management 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' long position.| Amanet Management vs. Ormat Technologies | Amanet Management vs. Multi Retail Group | Amanet Management vs. Nova | Amanet Management vs. B Communications |
| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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