Correlation Between Ormat Technologies and YH Dimri
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and YH Dimri 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 YH Dimri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and YH Dimri Construction, you can compare the effects of market volatilities on Ormat Technologies and YH Dimri 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 YH Dimri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and YH Dimri.
Diversification Opportunities for Ormat Technologies and YH Dimri
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ormat and DIMRI is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and YH Dimri Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YH Dimri Construction 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 YH Dimri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YH Dimri Construction has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and YH Dimri go up and down completely randomly.
Pair Corralation between Ormat Technologies and YH Dimri
Assuming the 90 days trading horizon Ormat Technologies is expected to under-perform the YH Dimri. But the stock apears to be less risky and, when comparing its historical volatility, Ormat Technologies is 1.5 times less risky than YH Dimri. The stock trades about -0.03 of its potential returns per unit of risk. The YH Dimri Construction is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,271,000 in YH Dimri Construction on September 1, 2024 and sell it today you would earn a total of 172,000 from holding YH Dimri Construction or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. YH Dimri Construction
Performance |
| Timeline |
| Ormat Technologies |
| YH Dimri Construction |
Ormat Technologies and YH Dimri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and YH Dimri
The main advantage of trading using opposite Ormat Technologies and YH Dimri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, YH Dimri 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 YH Dimri will offset losses from the drop in YH Dimri's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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