Correlation Between Photomyne and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Photomyne 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 Photomyne and Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photomyne and Ormat Technologies, you can compare the effects of market volatilities on Photomyne 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 Photomyne with a short position of Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Ormat Technologies.
Diversification Opportunities for Photomyne and Ormat Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Photomyne and Ormat is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies and Photomyne 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 Photomyne 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 Photomyne i.e., Photomyne and Ormat Technologies go up and down completely randomly.
Pair Corralation between Photomyne and Ormat Technologies
Assuming the 90 days trading horizon Photomyne is expected to under-perform the Ormat Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Photomyne is 1.24 times less risky than Ormat Technologies. The stock trades about -0.14 of its potential returns per unit of risk. The Ormat Technologies is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 3,043,770 in Ormat Technologies on August 29, 2024 and sell it today you would lose (79,770) from holding Ormat Technologies or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Photomyne vs. Ormat Technologies
Performance |
| Timeline |
| Photomyne |
| Ormat Technologies |
Photomyne and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photomyne and Ormat Technologies
The main advantage of trading using opposite Photomyne and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photomyne 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.| Photomyne vs. Priortech | Photomyne vs. Magic Software Enterprises | Photomyne vs. Ormat Technologies | Photomyne vs. Spuntech |
| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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