Correlation Between Ormat Technologies and Hamama
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Hamama 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 Hamama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Hamama, you can compare the effects of market volatilities on Ormat Technologies and Hamama 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 Hamama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Hamama.
Diversification Opportunities for Ormat Technologies and Hamama
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ormat and Hamama is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Hamama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamama 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 Hamama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamama has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Hamama go up and down completely randomly.
Pair Corralation between Ormat Technologies and Hamama
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 0.5 times more return on investment than Hamama. However, Ormat Technologies is 1.99 times less risky than Hamama. It trades about 0.0 of its potential returns per unit of risk. Hamama is currently generating about -0.01 per unit of risk. If you would invest 3,106,136 in Ormat Technologies on August 27, 2024 and sell it today you would lose (156,136) from holding Ormat Technologies or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Hamama
Performance |
| Timeline |
| Ormat Technologies |
| Hamama |
Ormat Technologies and Hamama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Hamama
The main advantage of trading using opposite Ormat Technologies and Hamama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Hamama 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 Hamama will offset losses from the drop in Hamama's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Hamama vs. Ormat Technologies | Hamama vs. Blender Financial Technologies | Hamama vs. Sarine Technologies | Hamama vs. Payment Financial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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