Correlation Between Ocean Thermal and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Ocean Thermal 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 Ocean Thermal and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Thermal Energy and Ormat Technologies, you can compare the effects of market volatilities on Ocean Thermal 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 Ocean Thermal with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Thermal and Ormat Technologies.
Diversification Opportunities for Ocean Thermal and Ormat Technologies
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ocean and Ormat is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Thermal Energy and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Ocean Thermal 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 Ocean Thermal Energy 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 Ocean Thermal i.e., Ocean Thermal and Ormat Technologies go up and down completely randomly.
Pair Corralation between Ocean Thermal and Ormat Technologies
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 | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ocean Thermal Energy vs. Ormat Technologies
Performance |
| Timeline |
| Ocean Thermal Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ormat Technologies |
Ocean Thermal and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Thermal and Ormat Technologies
The main advantage of trading using opposite Ocean Thermal and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Thermal 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.| Ocean Thermal vs. Verde Clean Fuels | Ocean Thermal vs. Smart Powerr Corp | Ocean Thermal vs. Ormat Technologies | Ocean Thermal vs. Tokyo Electric Power |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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