Correlation Between ORMAT TECHNOLOGIES and TOTAL GABON
Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and TOTAL GABON 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 TOTAL GABON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORMAT TECHNOLOGIES and TOTAL GABON, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and TOTAL GABON 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 TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and TOTAL GABON.
Diversification Opportunities for ORMAT TECHNOLOGIES and TOTAL GABON
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ORMAT and TOTAL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON 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 TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and TOTAL GABON go up and down completely randomly.
Pair Corralation between ORMAT TECHNOLOGIES and TOTAL GABON
Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to under-perform the TOTAL GABON. But the stock apears to be less risky and, when comparing its historical volatility, ORMAT TECHNOLOGIES is 1.01 times less risky than TOTAL GABON. The stock trades about 0.0 of its potential returns per unit of risk. The TOTAL GABON is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12,040 in TOTAL GABON on September 13, 2024 and sell it today you would earn a total of 6,560 from holding TOTAL GABON or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORMAT TECHNOLOGIES vs. TOTAL GABON
Performance |
| Timeline |
| ORMAT TECHNOLOGIES |
| TOTAL GABON |
ORMAT TECHNOLOGIES and TOTAL GABON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORMAT TECHNOLOGIES and TOTAL GABON
The main advantage of trading using opposite ORMAT TECHNOLOGIES and TOTAL GABON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, TOTAL GABON 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 TOTAL GABON will offset losses from the drop in TOTAL GABON's long position.| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
| TOTAL GABON vs. SEALED AIR | TOTAL GABON vs. LAir Liquide SA | TOTAL GABON vs. DELTA AIR LINES | TOTAL GABON vs. GLG LIFE TECH |
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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