Correlation Between Garofalo Health and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Garofalo Health 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 Garofalo Health and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garofalo Health Care and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Garofalo Health 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 Garofalo Health with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garofalo Health and ORMAT TECHNOLOGIES.
Diversification Opportunities for Garofalo Health and ORMAT TECHNOLOGIES
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garofalo and ORMAT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Garofalo Health Care and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Garofalo Health 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 Garofalo Health Care 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 Garofalo Health i.e., Garofalo Health and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Garofalo Health and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Garofalo Health Care is expected to generate 0.76 times more return on investment than ORMAT TECHNOLOGIES. However, Garofalo Health Care is 1.31 times less risky than ORMAT TECHNOLOGIES. It trades about -0.21 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.3 per unit of risk. If you would invest 546.00 in Garofalo Health Care on October 13, 2024 and sell it today you would lose (28.00) from holding Garofalo Health Care or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garofalo Health Care vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Garofalo Health Care |
| ORMAT TECHNOLOGIES |
Garofalo Health and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garofalo Health and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Garofalo Health and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garofalo Health 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.| Garofalo Health vs. MTY Food Group | Garofalo Health vs. PLANT VEDA FOODS | Garofalo Health vs. AWILCO DRILLING PLC | Garofalo Health vs. INDOFOOD AGRI RES |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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