Correlation Between Ormat Technologies and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Elbit Medical 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 Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Elbit Medical Technologies, you can compare the effects of market volatilities on Ormat Technologies and Elbit Medical 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 Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Elbit Medical.
Diversification Opportunities for Ormat Technologies and Elbit Medical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ormat and Elbit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Elbit Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Medical Techno 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 Elbit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Medical Techno has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Elbit Medical go up and down completely randomly.
Pair Corralation between Ormat Technologies and Elbit Medical
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 0.31 times more return on investment than Elbit Medical. However, Ormat Technologies is 3.23 times less risky than Elbit Medical. It trades about -0.06 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about -0.14 per unit of risk. If you would invest 2,997,789 in Ormat Technologies on August 30, 2024 and sell it today you would lose (47,789) from holding Ormat Technologies or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ormat Technologies vs. Elbit Medical Technologies
Performance |
| Timeline |
| Ormat Technologies |
| Elbit Medical Techno |
Ormat Technologies and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Elbit Medical
The main advantage of trading using opposite Ormat Technologies and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Elbit Medical 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 Elbit Medical will offset losses from the drop in Elbit Medical's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Elbit Medical vs. Nice | Elbit Medical vs. The Gold Bond | Elbit Medical vs. Bank Leumi Le Israel | Elbit Medical vs. ICL Israel Chemicals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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