Correlation Between HEALTHCARE REAL and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both HEALTHCARE REAL and ORMAT TECHNOLOGIES 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 HEALTHCARE REAL and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHCARE REAL A and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on HEALTHCARE REAL and ORMAT TECHNOLOGIES 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 HEALTHCARE REAL with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE REAL and ORMAT TECHNOLOGIES.
Diversification Opportunities for HEALTHCARE REAL and ORMAT TECHNOLOGIES
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HEALTHCARE and ORMAT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and HEALTHCARE REAL 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 HEALTHCARE REAL A are associated (or correlated) with ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of HEALTHCARE REAL i.e., HEALTHCARE REAL and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between HEALTHCARE REAL and ORMAT TECHNOLOGIES
Assuming the 90 days horizon HEALTHCARE REAL is expected to generate 5.73 times less return on investment than ORMAT TECHNOLOGIES. In addition to that, HEALTHCARE REAL is 1.17 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.02 of its total potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.14 per unit of volatility. If you would invest 6,629 in ORMAT TECHNOLOGIES on September 12, 2024 and sell it today you would earn a total of 801.00 from holding ORMAT TECHNOLOGIES or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHCARE REAL A vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| HEALTHCARE REAL A |
| ORMAT TECHNOLOGIES |
HEALTHCARE REAL and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHCARE REAL and ORMAT TECHNOLOGIES
The main advantage of trading using opposite HEALTHCARE REAL and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE REAL position performs unexpectedly, ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc |
| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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