Correlation Between Energy Vault and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Energy Vault 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 Energy Vault and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Vault Holdings and Ormat Technologies, you can compare the effects of market volatilities on Energy Vault 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 Energy Vault with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Vault and Ormat Technologies.
Diversification Opportunities for Energy Vault and Ormat Technologies
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and Ormat is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Energy Vault 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 Energy Vault Holdings 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 Energy Vault i.e., Energy Vault and Ormat Technologies go up and down completely randomly.
Pair Corralation between Energy Vault and Ormat Technologies
Given the investment horizon of 90 days Energy Vault Holdings is expected to generate 4.29 times more return on investment than Ormat Technologies. However, Energy Vault is 4.29 times more volatile than Ormat Technologies. It trades about 0.08 of its potential returns per unit of risk. Ormat Technologies is currently generating about -0.15 per unit of risk. If you would invest 206.00 in Energy Vault Holdings on October 26, 2024 and sell it today you would earn a total of 13.00 from holding Energy Vault Holdings or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Vault Holdings vs. Ormat Technologies
Performance |
| Timeline |
| Energy Vault Holdings |
| Ormat Technologies |
Energy Vault and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Vault and Ormat Technologies
The main advantage of trading using opposite Energy Vault and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Vault 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' long position.| Energy Vault vs. Renew Energy Global | Energy Vault vs. Fluence Energy | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
| Ormat Technologies vs. Altus Power | Ormat Technologies vs. Enlight Renewable Energy | Ormat Technologies vs. Fluence Energy | Ormat Technologies vs. Clearway Energy |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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