Correlation Between ORMAT TECHNOLOGIES and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and Bumrungrad Hospital 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 Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and Bumrungrad Hospital Public, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and Bumrungrad Hospital 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 Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and Bumrungrad Hospital.
Diversification Opportunities for ORMAT TECHNOLOGIES and Bumrungrad Hospital
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ORMAT and Bumrungrad is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital 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 Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and Bumrungrad Hospital
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 0.56 times more return on investment than Bumrungrad Hospital. However, ORMAT TECHNOLOGIES is 1.78 times less risky than Bumrungrad Hospital. It trades about 0.14 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.15 per unit of risk. If you would invest 6,629 in ORMAT TECHNOLOGIES on September 12, 2024 and sell it today you would earn a total of 801.00 from holding ORMAT TECHNOLOGIES or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| Bumrungrad Hospital |
ORMAT TECHNOLOGIES and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and Bumrungrad Hospital
The main advantage of trading using opposite ORMAT TECHNOLOGIES and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, Bumrungrad Hospital 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 Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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