Correlation Between Ormat Technologies and Nice
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Nice 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 Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Nice, you can compare the effects of market volatilities on Ormat Technologies and Nice 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 Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Nice.
Diversification Opportunities for Ormat Technologies and Nice
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ormat and Nice is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice 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 Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Nice go up and down completely randomly.
Pair Corralation between Ormat Technologies and Nice
Assuming the 90 days trading horizon Ormat Technologies is expected to under-perform the Nice. But the stock apears to be less risky and, when comparing its historical volatility, Ormat Technologies is 1.51 times less risky than Nice. The stock trades about -0.13 of its potential returns per unit of risk. The Nice is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,853,000 in Nice on January 19, 2024 and sell it today you would lose (74,000) from holding Nice or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ormat Technologies vs. Nice
Performance |
| Timeline |
| Ormat Technologies |
| Nice |
Ormat Technologies and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ormat Technologies and Nice
The main advantage of trading using opposite Ormat Technologies and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Nice 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 Nice will offset losses from the drop in Nice's long position.| Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
| Nice vs. Automatic Bank Services | Nice vs. EN Shoham Business | Nice vs. Rapac Communication Infrastructure | Nice vs. Qualitau |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |