Correlation Between ORMAT TECHNOLOGIES and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and CanSino Biologics 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 CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and CanSino Biologics, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and CanSino Biologics.
Diversification Opportunities for ORMAT TECHNOLOGIES and CanSino Biologics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ORMAT and CanSino is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and CanSino Biologics go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and CanSino Biologics
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 0.42 times more return on investment than CanSino Biologics. However, ORMAT TECHNOLOGIES is 2.38 times less risky than CanSino Biologics. It trades about -0.02 of its potential returns per unit of risk. CanSino Biologics is currently generating about -0.03 per unit of risk. If you would invest 8,135 in ORMAT TECHNOLOGIES on October 13, 2024 and sell it today you would lose (1,555) from holding ORMAT TECHNOLOGIES or give up 19.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. CanSino Biologics
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| CanSino Biologics |
ORMAT TECHNOLOGIES and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and CanSino Biologics
The main advantage of trading using opposite ORMAT TECHNOLOGIES and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| ORMAT TECHNOLOGIES vs. Compagnie Plastic Omnium | ORMAT TECHNOLOGIES vs. Garofalo Health Care | ORMAT TECHNOLOGIES vs. Wenzhou Kangning Hospital | ORMAT TECHNOLOGIES vs. Summit Materials |
| CanSino Biologics vs. Perdoceo Education | CanSino Biologics vs. Cleanaway Waste Management | CanSino Biologics vs. Kingdee International Software | CanSino Biologics vs. ORMAT TECHNOLOGIES |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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