Correlation Between Enlight Renewable and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Enlight 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 Enlight 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 Enlight Renewable Energy and Ormat Technologies, you can compare the effects of market volatilities on Enlight 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 Enlight Renewable with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Ormat Technologies.
Diversification Opportunities for Enlight Renewable and Ormat Technologies
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enlight and Ormat is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Enlight 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 Enlight Renewable 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 Enlight Renewable i.e., Enlight Renewable and Ormat Technologies go up and down completely randomly.
Pair Corralation between Enlight Renewable and Ormat Technologies
Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 1.97 times more return on investment than Ormat Technologies. However, Enlight Renewable is 1.97 times more volatile than Ormat Technologies. It trades about 0.06 of its potential returns per unit of risk. Ormat Technologies is currently generating about 0.03 per unit of risk. If you would invest 1,589 in Enlight Renewable Energy on August 27, 2024 and sell it today you would earn a total of 51.00 from holding Enlight Renewable Energy or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Renewable Energy vs. Ormat Technologies
Performance |
| Timeline |
| Enlight Renewable Energy |
| Ormat Technologies |
Enlight Renewable and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and Ormat Technologies
The main advantage of trading using opposite Enlight Renewable and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight 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.| Enlight Renewable vs. Atlantica Sustainable Infrastructure | Enlight Renewable vs. Verde Clean Fuels | Enlight Renewable vs. ReNew Energy Global | Enlight Renewable vs. Ellomay Capital |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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