Correlation Between Altius Renewable and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Altius Renewable 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 Altius Renewable and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altius Renewable Royalties and Ormat Technologies, you can compare the effects of market volatilities on Altius Renewable 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 Altius Renewable with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altius Renewable and Ormat Technologies.
Diversification Opportunities for Altius Renewable and Ormat Technologies
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altius and Ormat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Altius Renewable Royalties and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Altius Renewable 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 Altius Renewable Royalties 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 Altius Renewable i.e., Altius Renewable and Ormat Technologies go up and down completely randomly.
Pair Corralation between Altius Renewable and Ormat Technologies
Assuming the 90 days horizon Altius Renewable Royalties is expected to under-perform the Ormat Technologies. But the otc stock apears to be less risky and, when comparing its historical volatility, Altius Renewable Royalties is 4.06 times less risky than Ormat Technologies. The otc stock trades about -0.1 of its potential returns per unit of risk. The Ormat Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,087 in Ormat Technologies on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Ormat Technologies or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altius Renewable Royalties vs. Ormat Technologies
Performance |
| Timeline |
| Altius Renewable Roy |
| Ormat Technologies |
Altius Renewable and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altius Renewable and Ormat Technologies
The main advantage of trading using opposite Altius Renewable and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altius Renewable 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.| Altius Renewable vs. Atlantica Sustainable Infrastructure | Altius Renewable vs. Clearway Energy | Altius Renewable vs. Brookfield Renewable Corp | Altius Renewable vs. Nextera Energy Partners |
| Ormat Technologies vs. Altus Power | Ormat Technologies vs. Enlight Renewable Energy | Ormat Technologies vs. Fluence Energy | Ormat Technologies vs. Atlantica Sustainable Infrastructure |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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