Correlation Between Ormat Technologies and Energy Vault
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Energy Vault 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 Energy Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Energy Vault Holdings, you can compare the effects of market volatilities on Ormat Technologies and Energy Vault 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 Energy Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Energy Vault.
Diversification Opportunities for Ormat Technologies and Energy Vault
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ormat and Energy is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings 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 Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Energy Vault go up and down completely randomly.
Pair Corralation between Ormat Technologies and Energy Vault
Considering the 90-day investment horizon Ormat Technologies is expected to generate 5.93 times less return on investment than Energy Vault. But when comparing it to its historical volatility, Ormat Technologies is 6.69 times less risky than Energy Vault. It trades about 0.07 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Energy Vault Holdings on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Energy Vault Holdings or generate 1.61% 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. Energy Vault Holdings
Performance |
| Timeline |
| Ormat Technologies |
| Energy Vault Holdings |
Ormat Technologies and Energy Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Energy Vault
The main advantage of trading using opposite Ormat Technologies and Energy Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Energy Vault 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 Energy Vault will offset losses from the drop in Energy Vault's long position.| Ormat Technologies vs. Altus Power | Ormat Technologies vs. Enlight Renewable Energy | Ormat Technologies vs. Fluence Energy | Ormat Technologies vs. Atlantica Sustainable Infrastructure |
| Energy Vault vs. Altus Power | Energy Vault vs. Ormat Technologies | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
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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