Correlation Between Compagnie Plastic and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and ORMAT TECHNOLOGIES.
Diversification Opportunities for Compagnie Plastic and ORMAT TECHNOLOGIES
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compagnie and ORMAT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Compagnie Plastic and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 0.98 times more return on investment than ORMAT TECHNOLOGIES. However, Compagnie Plastic Omnium is 1.02 times less risky than ORMAT TECHNOLOGIES. It trades about 0.13 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.3 per unit of risk. If you would invest 999.00 in Compagnie Plastic Omnium on October 13, 2024 and sell it today you would earn a total of 39.00 from holding Compagnie Plastic Omnium or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| ORMAT TECHNOLOGIES |
Compagnie Plastic and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Compagnie Plastic and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. MHP Hotel AG | Compagnie Plastic vs. Choice Hotels International | Compagnie Plastic vs. MARKET VECTR RETAIL | Compagnie Plastic vs. CarsalesCom |
| ORMAT TECHNOLOGIES vs. Compagnie Plastic Omnium | ORMAT TECHNOLOGIES vs. Garofalo Health Care | ORMAT TECHNOLOGIES vs. Wenzhou Kangning Hospital | ORMAT TECHNOLOGIES vs. Summit Materials |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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