Correlation Between ORMAT TECHNOLOGIES and Esprinet SpA
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and Esprinet SpA 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 Esprinet SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and Esprinet SpA, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and Esprinet SpA 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 Esprinet SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and Esprinet SpA.
Diversification Opportunities for ORMAT TECHNOLOGIES and Esprinet SpA
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ORMAT and Esprinet is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Esprinet SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esprinet SpA 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 Esprinet SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esprinet SpA has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Esprinet SpA go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and Esprinet SpA
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 0.84 times more return on investment than Esprinet SpA. However, ORMAT TECHNOLOGIES is 1.19 times less risky than Esprinet SpA. It trades about -0.26 of its potential returns per unit of risk. Esprinet SpA is currently generating about -0.28 per unit of risk. If you would invest 6,950 in ORMAT TECHNOLOGIES on October 14, 2024 and sell it today you would lose (512.00) from holding ORMAT TECHNOLOGIES or give up 7.37% 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. Esprinet SpA
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| Esprinet SpA |
ORMAT TECHNOLOGIES and Esprinet SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and Esprinet SpA
The main advantage of trading using opposite ORMAT TECHNOLOGIES and Esprinet SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, Esprinet SpA 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 Esprinet SpA will offset losses from the drop in Esprinet SpA's long position.| ORMAT TECHNOLOGIES vs. SALESFORCE INC CDR | ORMAT TECHNOLOGIES vs. Delta Air Lines | ORMAT TECHNOLOGIES vs. Pentair plc | ORMAT TECHNOLOGIES vs. Wizz Air Holdings |
| Esprinet SpA vs. ORMAT TECHNOLOGIES | Esprinet SpA vs. WT OFFSHORE | Esprinet SpA vs. EIDESVIK OFFSHORE NK | Esprinet SpA vs. Kingdee International Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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