Correlation Between Ormat Technologies and Ellomay Capital
Can any of the company-specific risk be diversified away by investing in both Ormat Technologies and Ellomay Capital 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 Ellomay Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ormat Technologies and Ellomay Capital, you can compare the effects of market volatilities on Ormat Technologies and Ellomay Capital 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 Ellomay Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ormat Technologies and Ellomay Capital.
Diversification Opportunities for Ormat Technologies and Ellomay Capital
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ormat and Ellomay is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ormat Technologies and Ellomay Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellomay Capital 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 Ellomay Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellomay Capital has no effect on the direction of Ormat Technologies i.e., Ormat Technologies and Ellomay Capital go up and down completely randomly.
Pair Corralation between Ormat Technologies and Ellomay Capital
Assuming the 90 days trading horizon Ormat Technologies is expected to generate 0.62 times more return on investment than Ellomay Capital. However, Ormat Technologies is 1.6 times less risky than Ellomay Capital. It trades about 0.24 of its potential returns per unit of risk. Ellomay Capital is currently generating about -0.13 per unit of risk. If you would invest 2,336,939 in Ormat Technologies on March 14, 2024 and sell it today you would earn a total of 454,061 from holding Ormat Technologies or generate 19.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 75.41% |
Values | Daily Returns |
Ormat Technologies vs. Ellomay Capital
Performance |
Timeline |
Ormat Technologies |
Ellomay Capital |
Ormat Technologies and Ellomay Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ormat Technologies and Ellomay Capital
The main advantage of trading using opposite Ormat Technologies and Ellomay Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ormat Technologies position performs unexpectedly, Ellomay Capital 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 Ellomay Capital will offset losses from the drop in Ellomay Capital's long position.Ormat Technologies vs. Elbit Systems | Ormat Technologies vs. Nice | Ormat Technologies vs. Tower Semiconductor | Ormat Technologies vs. Nova |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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