Correlation Between ORMAT TECHNOLOGIES and CryoLife
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and CryoLife 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 CryoLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and CryoLife, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and CryoLife 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 CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and CryoLife.
Diversification Opportunities for ORMAT TECHNOLOGIES and CryoLife
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ORMAT and CryoLife is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and CryoLife go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and CryoLife
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 14.4 times less return on investment than CryoLife. But when comparing it to its historical volatility, ORMAT TECHNOLOGIES is 1.5 times less risky than CryoLife. It trades about 0.01 of its potential returns per unit of risk. CryoLife is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,460 in CryoLife on September 2, 2024 and sell it today you would earn a total of 1,275 from holding CryoLife or generate 87.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. CryoLife
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| CryoLife |
ORMAT TECHNOLOGIES and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and CryoLife
The main advantage of trading using opposite ORMAT TECHNOLOGIES and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife's long position.| ORMAT TECHNOLOGIES vs. SIVERS SEMICONDUCTORS AB | ORMAT TECHNOLOGIES vs. Darden Restaurants | ORMAT TECHNOLOGIES vs. Reliance Steel Aluminum | ORMAT TECHNOLOGIES vs. Q2M Managementberatung AG |
| CryoLife vs. Tri Pointe Homes | CryoLife vs. Platinum Investment Management | CryoLife vs. SOLSTAD OFFSHORE NK | CryoLife vs. Sims Metal Management |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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