Correlation Between Ormat Technologies and Bio Meat
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Bio Meat 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 Ormat Technologies and Bio Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Bio Meat Foodtech, you can compare the effects of market volatilities on Ormat Technologies and Bio Meat 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 Ormat Technologies with a short position of Bio Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Bio Meat.
Diversification Opportunities for Ormat Technologies and Bio Meat
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ormat and Bio is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Bio Meat Foodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Meat Foodtech and Ormat Technologies 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 Ormat Technologies are associated (or correlated) with Bio Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Meat Foodtech has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Bio Meat go up and down completely randomly.
Pair Corralation between Ormat Technologies and Bio Meat
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 0.48 times more return on investment than Bio Meat. However, Ormat Technologies is 2.09 times less risky than Bio Meat. It trades about 0.01 of its potential returns per unit of risk. Bio Meat Foodtech is currently generating about -0.08 per unit of risk. If you would invest 2,930,749 in Ormat Technologies on August 28, 2024 and sell it today you would earn a total of 59,251 from holding Ormat Technologies or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ormat Technologies vs. Bio Meat Foodtech
Performance |
| Timeline |
| Ormat Technologies |
| Bio Meat Foodtech |
Ormat Technologies and Bio Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Bio Meat
The main advantage of trading using opposite Ormat Technologies and Bio Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Bio Meat 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 Bio Meat will offset losses from the drop in Bio Meat's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Bio Meat vs. Israel China Biotechnology | Bio Meat vs. Teuza A Fairchild | Bio Meat vs. Priortech | Bio Meat vs. Orbit 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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