Correlation Between Ormat Technologies and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Global Knafaim 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 Global Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Global Knafaim Leasing, you can compare the effects of market volatilities on Ormat Technologies and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Global Knafaim.
Diversification Opportunities for Ormat Technologies and Global Knafaim
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ormat and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Global Knafaim go up and down completely randomly.
Pair Corralation between Ormat Technologies and Global Knafaim
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 22.98 times less return on investment than Global Knafaim. But when comparing it to its historical volatility, Ormat Technologies is 1.28 times less risky than Global Knafaim. It trades about 0.0 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,380 in Global Knafaim Leasing on September 2, 2024 and sell it today you would earn a total of 1,650 from holding Global Knafaim Leasing or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Global Knafaim Leasing
Performance |
| Timeline |
| Ormat Technologies |
| Global Knafaim Leasing |
Ormat Technologies and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Global Knafaim
The main advantage of trading using opposite Ormat Technologies and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Airport City | Global Knafaim vs. Harel Insurance Investments |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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