Correlation Between ORMAT TECHNOLOGIES and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and Hochschild Mining 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 Hochschild Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and Hochschild Mining plc, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and Hochschild Mining 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 Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and Hochschild Mining.
Diversification Opportunities for ORMAT TECHNOLOGIES and Hochschild Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ORMAT and Hochschild is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Hochschild Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining plc 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 Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining plc has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Hochschild Mining go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and Hochschild Mining
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 197.13 times less return on investment than Hochschild Mining. But when comparing it to its historical volatility, ORMAT TECHNOLOGIES is 2.12 times less risky than Hochschild Mining. It trades about 0.0 of its potential returns per unit of risk. Hochschild Mining plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Hochschild Mining plc on August 31, 2024 and sell it today you would earn a total of 159.00 from holding Hochschild Mining plc or generate 163.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. Hochschild Mining plc
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| Hochschild Mining plc |
ORMAT TECHNOLOGIES and Hochschild Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and Hochschild Mining
The main advantage of trading using opposite ORMAT TECHNOLOGIES and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, Hochschild Mining 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 Hochschild Mining will offset losses from the drop in Hochschild Mining'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 |
| Hochschild Mining vs. Carsales | Hochschild Mining vs. GEELY AUTOMOBILE | Hochschild Mining vs. The Hanover Insurance | Hochschild Mining vs. OFFICE DEPOT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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