Correlation Between Apple and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Apple 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 Apple with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ORMAT TECHNOLOGIES.
Diversification Opportunities for Apple and ORMAT TECHNOLOGIES
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and ORMAT is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Apple 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 Apple 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 Apple i.e., Apple and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Apple and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.8 times more return on investment than ORMAT TECHNOLOGIES. However, Apple Inc is 1.26 times less risky than ORMAT TECHNOLOGIES. It trades about 0.09 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.06 per unit of risk. If you would invest 17,398 in Apple Inc on September 14, 2024 and sell it today you would earn a total of 6,292 from holding Apple Inc or generate 36.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Apple Inc |
| ORMAT TECHNOLOGIES |
Apple and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Apple and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Amkor Technology | Apple vs. Lion Biotechnologies | Apple vs. GOLD ROAD RES | Apple vs. Gaztransport Technigaz SA |
| ORMAT TECHNOLOGIES vs. TYSON FOODS A | ORMAT TECHNOLOGIES vs. EBRO FOODS | ORMAT TECHNOLOGIES vs. China Communications Services | ORMAT TECHNOLOGIES vs. CITIC Telecom International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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