Correlation Between KOBE STEEL and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both KOBE STEEL 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 KOBE STEEL and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOBE STEEL LTD and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on KOBE STEEL 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 KOBE STEEL with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and ORMAT TECHNOLOGIES.
Diversification Opportunities for KOBE STEEL and ORMAT TECHNOLOGIES
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KOBE and ORMAT is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and KOBE STEEL 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 KOBE STEEL LTD 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 KOBE STEEL i.e., KOBE STEEL and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between KOBE STEEL and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.78 times more return on investment than ORMAT TECHNOLOGIES. However, KOBE STEEL LTD is 1.29 times less risky than ORMAT TECHNOLOGIES. It trades about -0.01 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.09 per unit of risk. If you would invest 1,003 in KOBE STEEL LTD on October 24, 2024 and sell it today you would lose (15.00) from holding KOBE STEEL LTD or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| KOBE STEEL LTD |
| ORMAT TECHNOLOGIES |
KOBE STEEL and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and ORMAT TECHNOLOGIES
The main advantage of trading using opposite KOBE STEEL and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL 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.| KOBE STEEL vs. Singapore Telecommunications Limited | KOBE STEEL vs. SOCKET MOBILE NEW | KOBE STEEL vs. SK TELECOM TDADR | KOBE STEEL vs. OFFICE DEPOT |
| ORMAT TECHNOLOGIES vs. KOBE STEEL LTD | ORMAT TECHNOLOGIES vs. Gaztransport Technigaz SA | ORMAT TECHNOLOGIES vs. Tianjin Capital Environmental | ORMAT TECHNOLOGIES vs. DICKS Sporting Goods |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |