Correlation Between ASPEN TECHINC and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and ORMAT TECHNOLOGIES.
Diversification Opportunities for ASPEN TECHINC and ORMAT TECHNOLOGIES
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASPEN and ORMAT is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and ORMAT TECHNOLOGIES
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.47 times more return on investment than ORMAT TECHNOLOGIES. However, ASPEN TECHINC DL is 2.12 times less risky than ORMAT TECHNOLOGIES. It trades about 0.12 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.17 per unit of risk. If you would invest 23,600 in ASPEN TECHINC DL on October 28, 2024 and sell it today you would earn a total of 400.00 from holding ASPEN TECHINC DL or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| ASPEN TECHINC DL |
| ORMAT TECHNOLOGIES |
ASPEN TECHINC and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and ORMAT TECHNOLOGIES
The main advantage of trading using opposite ASPEN TECHINC and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.| ASPEN TECHINC vs. Ebro Foods SA | ASPEN TECHINC vs. PLANT VEDA FOODS | ASPEN TECHINC vs. PLAYSTUDIOS A DL 0001 | ASPEN TECHINC vs. Scandinavian Tobacco Group |
| ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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