Correlation Between ZURICH INSURANCE and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE 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 ZURICH INSURANCE and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZURICH INSURANCE GROUP and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on ZURICH INSURANCE 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 ZURICH INSURANCE with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and ORMAT TECHNOLOGIES.
Diversification Opportunities for ZURICH INSURANCE and ORMAT TECHNOLOGIES
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZURICH and ORMAT is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and ZURICH INSURANCE 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 ZURICH INSURANCE GROUP 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 ZURICH INSURANCE i.e., ZURICH INSURANCE and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and ORMAT TECHNOLOGIES
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.63 times more return on investment than ORMAT TECHNOLOGIES. However, ZURICH INSURANCE GROUP is 1.59 times less risky than ORMAT TECHNOLOGIES. It trades about 0.07 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.15 per unit of risk. If you would invest 2,720 in ZURICH INSURANCE GROUP on October 1, 2024 and sell it today you would earn a total of 80.00 from holding ZURICH INSURANCE GROUP or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| ZURICH INSURANCE |
| ORMAT TECHNOLOGIES |
ZURICH INSURANCE and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and ORMAT TECHNOLOGIES
The main advantage of trading using opposite ZURICH INSURANCE and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE 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.The idea behind ZURICH INSURANCE GROUP and ORMAT TECHNOLOGIES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ORMAT TECHNOLOGIES vs. VIRGIN WINES UK | ORMAT TECHNOLOGIES vs. Entravision Communications | ORMAT TECHNOLOGIES vs. China Communications Services | ORMAT TECHNOLOGIES vs. CHINA TONTINE WINES |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |