Correlation Between GE Vernova and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both GE Vernova 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 GE Vernova and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Vernova LLC and Ormat Technologies, you can compare the effects of market volatilities on GE Vernova 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 GE Vernova with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Ormat Technologies.
Diversification Opportunities for GE Vernova and Ormat Technologies
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GEV and Ormat is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and GE Vernova 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 GE Vernova LLC 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 GE Vernova i.e., GE Vernova and Ormat Technologies go up and down completely randomly.
Pair Corralation between GE Vernova and Ormat Technologies
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 1.79 times more return on investment than Ormat Technologies. However, GE Vernova is 1.79 times more volatile than Ormat Technologies. It trades about 0.2 of its potential returns per unit of risk. Ormat Technologies is currently generating about 0.05 per unit of risk. If you would invest 13,125 in GE Vernova LLC on August 24, 2024 and sell it today you would earn a total of 20,860 from holding GE Vernova LLC or generate 158.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 66.8% |
| Values | Daily Returns |
GE Vernova LLC vs. Ormat Technologies
Performance |
| Timeline |
| GE Vernova LLC |
| Ormat Technologies |
GE Vernova and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and Ormat Technologies
The main advantage of trading using opposite GE Vernova and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova 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.| GE Vernova vs. Sun Country Airlines | GE Vernova vs. Where Food Comes | GE Vernova vs. Ihuman Inc | GE Vernova vs. AMCON Distributing |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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