Correlation Between ORMAT TECHNOLOGIES and Compagnie

Can any of the company-specific risk be diversified away by investing in both ORMAT TECHNOLOGIES and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ORMAT TECHNOLOGIES and Compagnie de Saint Gobain, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and Compagnie.

Diversification Opportunities for ORMAT TECHNOLOGIES and Compagnie

0.0

Correlation Coefficient

ORMAT TECHNOLOGIES  Compagnie

Pay attention - limited upside

The 3 months correlation between ORMAT and Compagnie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Compagnie go up and down completely randomly.

Pair Corralation between ORMAT TECHNOLOGIES and Compagnie

If you would invest (100.00) in Compagnie de Saint Gobain on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Compagnie de Saint Gobain or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ORMAT TECHNOLOGIES  vs.  Compagnie de Saint Gobain

ORMAT TECHNOLOGIES

Risk-Adjusted Performance

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Very Weak

Over the last 90 days ORMAT TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ORMAT TECHNOLOGIES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Compagnie de Saint

Risk-Adjusted Performance

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Modest

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Compagnie is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ORMAT TECHNOLOGIES and Compagnie

The main advantage of trading using opposite ORMAT TECHNOLOGIES and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.

The idea behind ORMAT TECHNOLOGIES and Compagnie de Saint Gobain pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.