Correlation Between North American and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both North American 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 North American and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on North American 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 North American with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and ORMAT TECHNOLOGIES.
Diversification Opportunities for North American and ORMAT TECHNOLOGIES
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between North and ORMAT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and North American 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 North American Construction 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 North American i.e., North American and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between North American and ORMAT TECHNOLOGIES
Assuming the 90 days horizon North American Construction is expected to generate 1.72 times more return on investment than ORMAT TECHNOLOGIES. However, North American is 1.72 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.02 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.01 per unit of risk. If you would invest 1,454 in North American Construction on December 4, 2024 and sell it today you would earn a total of 226.00 from holding North American Construction or generate 15.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
North American Construction vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| North American Const |
| ORMAT TECHNOLOGIES |
North American and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and ORMAT TECHNOLOGIES
The main advantage of trading using opposite North American and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American 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.| North American vs. ANTA Sports Products | North American vs. PLAYMATES HLDGS NEW | North American vs. YATRA ONLINE DL 0001 | North American vs. CODERE ONLINE LUX |
| ORMAT TECHNOLOGIES vs. GAMES BOX SA | ORMAT TECHNOLOGIES vs. USWE SPORTS AB | ORMAT TECHNOLOGIES vs. SPORT LISBOA E | ORMAT TECHNOLOGIES vs. Corsair Gaming |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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