Correlation Between INTER CARS and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and ORMAT TECHNOLOGIES.
Diversification Opportunities for INTER CARS and ORMAT TECHNOLOGIES
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and ORMAT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between INTER CARS and ORMAT TECHNOLOGIES
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.22 times more return on investment than ORMAT TECHNOLOGIES. However, INTER CARS is 1.22 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.06 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.02 per unit of risk. If you would invest 11,980 in INTER CARS SA on December 28, 2024 and sell it today you would earn a total of 780.00 from holding INTER CARS SA or generate 6.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
INTER CARS SA vs. ORMAT TECHNOLOGIES
Performance |
Timeline |
INTER CARS SA |
ORMAT TECHNOLOGIES |
INTER CARS and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INTER CARS and ORMAT TECHNOLOGIES
The main advantage of trading using opposite INTER CARS and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.INTER CARS vs. SmarTone Telecommunications Holdings | INTER CARS vs. Hellenic Telecommunications Organization | INTER CARS vs. CHINA TELECOM H | INTER CARS vs. Hitachi Construction Machinery |
ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc | ORMAT TECHNOLOGIES vs. Apple Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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