Correlation Between Orbit Technologies and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Orbit Technologies and Ormat Technologies 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 Orbit Technologies and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Technologies and Ormat Technologies, you can compare the effects of market volatilities on Orbit Technologies and Ormat Technologies 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 Orbit Technologies with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Technologies and Ormat Technologies.
Diversification Opportunities for Orbit Technologies and Ormat Technologies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orbit and Ormat is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Technologies and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Orbit 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 Orbit Technologies are associated (or correlated) with Ormat Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ormat Technologies has no effect on the direction of Orbit Technologies i.e., Orbit Technologies and Ormat Technologies go up and down completely randomly.
Pair Corralation between Orbit Technologies and Ormat Technologies
Assuming the 90 days trading horizon Orbit Technologies is expected to generate 1.61 times more return on investment than Ormat Technologies. However, Orbit Technologies is 1.61 times more volatile than Ormat Technologies. It trades about 0.24 of its potential returns per unit of risk. Ormat Technologies is currently generating about -0.03 per unit of risk. If you would invest 253,600 in Orbit Technologies on September 1, 2024 and sell it today you would earn a total of 21,400 from holding Orbit Technologies or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orbit Technologies vs. Ormat Technologies
Performance |
| Timeline |
| Orbit Technologies |
| Ormat Technologies |
Orbit Technologies and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Technologies and Ormat Technologies
The main advantage of trading using opposite Orbit Technologies and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Technologies position performs unexpectedly, Ormat Technologies 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 Ormat Technologies will offset losses from the drop in Ormat Technologies' long position.| Orbit Technologies vs. Arad | Orbit Technologies vs. Alony Hetz Properties | Orbit Technologies vs. Airport City | Orbit Technologies vs. Harel Insurance Investments |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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