Correlation Between Ormat Technologies and Spuntech
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Spuntech 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 Spuntech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Spuntech, you can compare the effects of market volatilities on Ormat Technologies and Spuntech 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 Spuntech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Spuntech.
Diversification Opportunities for Ormat Technologies and Spuntech
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ormat and Spuntech is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Spuntech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spuntech 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 Spuntech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spuntech has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Spuntech go up and down completely randomly.
Pair Corralation between Ormat Technologies and Spuntech
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 1.29 times less return on investment than Spuntech. In addition to that, Ormat Technologies is 1.07 times more volatile than Spuntech. It trades about 0.19 of its total potential returns per unit of risk. Spuntech is currently generating about 0.26 per unit of volatility. If you would invest 38,020 in Spuntech on November 27, 2024 and sell it today you would earn a total of 2,890 from holding Spuntech or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Spuntech
Performance |
| Timeline |
| Ormat Technologies |
| Spuntech |
Ormat Technologies and Spuntech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Spuntech
The main advantage of trading using opposite Ormat Technologies and Spuntech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Spuntech 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 Spuntech will offset losses from the drop in Spuntech's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Spuntech vs. Neto ME Holdings | Spuntech vs. Aryt Industries | Spuntech vs. Kerur Holdings | Spuntech vs. Scope Metals Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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