Correlation Between Ormat Technologies and Bezeq Israeli
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Bezeq Israeli 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 Ormat Technologies and Bezeq Israeli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Bezeq Israeli Telecommunication, you can compare the effects of market volatilities on Ormat Technologies and Bezeq Israeli 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 Ormat Technologies with a short position of Bezeq Israeli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Bezeq Israeli.
Diversification Opportunities for Ormat Technologies and Bezeq Israeli
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ormat and Bezeq is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Bezeq Israeli Telecommunicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bezeq Israeli Teleco and Ormat 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 Ormat Technologies are associated (or correlated) with Bezeq Israeli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bezeq Israeli Teleco has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Bezeq Israeli go up and down completely randomly.
Pair Corralation between Ormat Technologies and Bezeq Israeli
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 1.16 times more return on investment than Bezeq Israeli. However, Ormat Technologies is 1.16 times more volatile than Bezeq Israeli Telecommunication. It trades about -0.01 of its potential returns per unit of risk. Bezeq Israeli Telecommunication is currently generating about -0.13 per unit of risk. If you would invest 2,379,000 in Ormat Technologies on January 20, 2024 and sell it today you would lose (14,000) from holding Ormat Technologies or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Bezeq Israeli Telecommunicatio
Performance |
| Timeline |
| Ormat Technologies |
| Bezeq Israeli Teleco |
Ormat Technologies and Bezeq Israeli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Bezeq Israeli
The main advantage of trading using opposite Ormat Technologies and Bezeq Israeli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Bezeq Israeli 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 Bezeq Israeli will offset losses from the drop in Bezeq Israeli's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Bezeq Israeli vs. EN Shoham Business | Bezeq Israeli vs. Accel Solutions Group | Bezeq Israeli vs. SR Accord | Bezeq Israeli vs. Rapac Communication Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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