Correlation Between PLAYTECH and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both PLAYTECH 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 PLAYTECH and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTECH and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on PLAYTECH 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 PLAYTECH with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTECH and ORMAT TECHNOLOGIES.
Diversification Opportunities for PLAYTECH and ORMAT TECHNOLOGIES
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PLAYTECH and ORMAT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTECH and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and PLAYTECH 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 PLAYTECH 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 PLAYTECH i.e., PLAYTECH and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between PLAYTECH and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon PLAYTECH is expected to under-perform the ORMAT TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTECH is 1.55 times less risky than ORMAT TECHNOLOGIES. The stock trades about -0.25 of its potential returns per unit of risk. The ORMAT TECHNOLOGIES is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 6,894 in ORMAT TECHNOLOGIES on October 17, 2024 and sell it today you would lose (344.00) from holding ORMAT TECHNOLOGIES or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTECH vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| PLAYTECH |
| ORMAT TECHNOLOGIES |
PLAYTECH and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTECH and ORMAT TECHNOLOGIES
The main advantage of trading using opposite PLAYTECH and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTECH 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's long position.| PLAYTECH vs. FORWARD AIR P | PLAYTECH vs. Pentair plc | PLAYTECH vs. Corsair Gaming | PLAYTECH vs. Delta Air Lines |
| ORMAT TECHNOLOGIES vs. PLAYSTUDIOS A DL 0001 | ORMAT TECHNOLOGIES vs. ARISTOCRAT LEISURE | ORMAT TECHNOLOGIES vs. PLAYTECH | ORMAT TECHNOLOGIES vs. Singapore Airlines Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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