Correlation Between NYSE Composite and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ormat Technologies, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ormat Technologies.
Diversification Opportunities for NYSE Composite and Ormat Technologies
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Ormat is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Ormat Technologies go up and down completely randomly.
Pair Corralation between NYSE Composite and Ormat Technologies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.42 times more return on investment than Ormat Technologies. However, NYSE Composite is 2.4 times less risky than Ormat Technologies. It trades about 0.08 of its potential returns per unit of risk. Ormat Technologies is currently generating about -0.01 per unit of risk. If you would invest 1,589,536 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 422,809 from holding NYSE Composite or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Ormat Technologies
Performance |
| Timeline |
NYSE Composite and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ormat Technologies
Pair trading matchups for Ormat Technologies
Pair Trading with NYSE Composite and Ormat Technologies
The main advantage of trading using opposite NYSE Composite and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Ormat Technologies vs. Altus Power | Ormat Technologies vs. Enlight Renewable Energy | Ormat Technologies vs. Fluence Energy | Ormat Technologies vs. Atlantica Sustainable Infrastructure |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |