Correlation Between ORMAT TECHNOLOGIES and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and ONWARD MEDICAL 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 ORMAT TECHNOLOGIES and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and ONWARD MEDICAL BV, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and ONWARD MEDICAL 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 ORMAT TECHNOLOGIES with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and ONWARD MEDICAL.
Diversification Opportunities for ORMAT TECHNOLOGIES and ONWARD MEDICAL
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ORMAT and ONWARD is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and ONWARD MEDICAL
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, ORMAT TECHNOLOGIES is 3.37 times less risky than ONWARD MEDICAL. The stock trades about 0.0 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 585.00 in ONWARD MEDICAL BV on September 3, 2024 and sell it today you would lose (143.00) from holding ONWARD MEDICAL BV or give up 24.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| ONWARD MEDICAL BV |
ORMAT TECHNOLOGIES and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and ONWARD MEDICAL
The main advantage of trading using opposite ORMAT TECHNOLOGIES and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| ORMAT TECHNOLOGIES vs. TOTAL GABON | ORMAT TECHNOLOGIES vs. Walgreens Boots Alliance | ORMAT TECHNOLOGIES vs. Peak Resources Limited |
| ONWARD MEDICAL vs. ADRIATIC METALS LS 013355 | ONWARD MEDICAL vs. TFS FINANCIAL | ONWARD MEDICAL vs. Aozora Bank | ONWARD MEDICAL vs. COMINTL BANK ADR1 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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