Correlation Between ORMAT TECHNOLOGIES and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and Mitsui OSK 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 Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and Mitsui OSK Lines, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and Mitsui OSK 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 Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and Mitsui OSK.
Diversification Opportunities for ORMAT TECHNOLOGIES and Mitsui OSK
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ORMAT and Mitsui is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines 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 Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Mitsui OSK go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and Mitsui OSK
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to under-perform the Mitsui OSK. But the stock apears to be less risky and, when comparing its historical volatility, ORMAT TECHNOLOGIES is 1.46 times less risky than Mitsui OSK. The stock trades about -0.16 of its potential returns per unit of risk. The Mitsui OSK Lines is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,152 in Mitsui OSK Lines on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Mitsui OSK Lines or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. Mitsui OSK Lines
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| Mitsui OSK Lines |
ORMAT TECHNOLOGIES and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and Mitsui OSK
The main advantage of trading using opposite ORMAT TECHNOLOGIES and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, Mitsui OSK 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 Mitsui OSK will offset losses from the drop in Mitsui OSK's long position.| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
| Mitsui OSK vs. Tower One Wireless | Mitsui OSK vs. Highlight Communications AG | Mitsui OSK vs. SBA Communications Corp | Mitsui OSK vs. Uber 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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