Correlation Between Ormat Technologies and Medivie Therapeutic
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Medivie Therapeutic 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 Medivie Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Medivie Therapeutic, you can compare the effects of market volatilities on Ormat Technologies and Medivie Therapeutic 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 Medivie Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Medivie Therapeutic.
Diversification Opportunities for Ormat Technologies and Medivie Therapeutic
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ormat and Medivie is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Medivie Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medivie Therapeutic 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 Medivie Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medivie Therapeutic has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Medivie Therapeutic go up and down completely randomly.
Pair Corralation between Ormat Technologies and Medivie Therapeutic
Assuming the 90 days trading horizon Ormat Technologies is expected to under-perform the Medivie Therapeutic. But the stock apears to be less risky and, when comparing its historical volatility, Ormat Technologies is 3.19 times less risky than Medivie Therapeutic. The stock trades about -0.01 of its potential returns per unit of risk. The Medivie Therapeutic is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,760 in Medivie Therapeutic on January 20, 2024 and sell it today you would earn a total of 1,280 from holding Medivie Therapeutic or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Medivie Therapeutic
Performance |
| Timeline |
| Ormat Technologies |
| Medivie Therapeutic |
Ormat Technologies and Medivie Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Medivie Therapeutic
The main advantage of trading using opposite Ormat Technologies and Medivie Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Medivie Therapeutic 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 Medivie Therapeutic will offset losses from the drop in Medivie Therapeutic's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Medivie Therapeutic vs. Tower Semiconductor | Medivie Therapeutic vs. Orbit Technologies | Medivie Therapeutic vs. Sure Tech Investments LP | Medivie Therapeutic vs. Sofwave Medical |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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