Correlation Between Ormat Technologies and MediPress Health
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and MediPress Health 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 MediPress Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and MediPress Health Limited Partnership, you can compare the effects of market volatilities on Ormat Technologies and MediPress Health 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 MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and MediPress Health.
Diversification Opportunities for Ormat Technologies and MediPress Health
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ormat and MediPress is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim 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 MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and MediPress Health go up and down completely randomly.
Pair Corralation between Ormat Technologies and MediPress Health
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 0.72 times more return on investment than MediPress Health. However, Ormat Technologies is 1.4 times less risky than MediPress Health. It trades about 0.04 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about 0.02 per unit of risk. If you would invest 2,611,270 in Ormat Technologies on September 2, 2024 and sell it today you would earn a total of 338,730 from holding Ormat Technologies or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Ormat Technologies vs. MediPress Health Limited Partn
Performance |
| Timeline |
| Ormat Technologies |
| MediPress Health Lim |
Ormat Technologies and MediPress Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and MediPress Health
The main advantage of trading using opposite Ormat Technologies and MediPress Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, MediPress Health 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 MediPress Health will offset losses from the drop in MediPress Health's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| MediPress Health vs. Nice | MediPress Health vs. The Gold Bond | MediPress Health vs. Bank Leumi Le Israel | MediPress Health 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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