Correlation Between Lapidoth and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Lapidoth and OPC Energy 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 Lapidoth and OPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lapidoth and OPC Energy, you can compare the effects of market volatilities on Lapidoth and OPC Energy 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 Lapidoth with a short position of OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lapidoth and OPC Energy.
Diversification Opportunities for Lapidoth and OPC Energy
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lapidoth and OPC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lapidoth and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy and Lapidoth 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 Lapidoth are associated (or correlated) with OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Lapidoth i.e., Lapidoth and OPC Energy go up and down completely randomly.
Pair Corralation between Lapidoth and OPC Energy
Assuming the 90 days trading horizon Lapidoth is expected to generate 2.55 times less return on investment than OPC Energy. In addition to that, Lapidoth is 1.01 times more volatile than OPC Energy. It trades about 0.01 of its total potential returns per unit of risk. OPC Energy is currently generating about 0.04 per unit of volatility. If you would invest 243,900 in OPC Energy on August 28, 2024 and sell it today you would earn a total of 43,100 from holding OPC Energy or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lapidoth vs. OPC Energy
Performance |
| Timeline |
| Lapidoth |
| OPC Energy |
Lapidoth and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lapidoth and OPC Energy
The main advantage of trading using opposite Lapidoth and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lapidoth position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.| Lapidoth vs. Atreyu Capital Markets | Lapidoth vs. IBI Inv House | Lapidoth vs. Delek Automotive Systems | Lapidoth vs. Scope Metals Group |
| OPC Energy vs. Enlight Renewable Energy | OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Alony Hetz Properties | OPC Energy vs. Ormat 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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