Correlation Between ORMAT TECHNOLOGIES and T MOBILE

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

By analyzing existing cross correlation between ORMAT TECHNOLOGIES and T MOBILE INCDL 00001, you can compare the effects of market volatilities on ORMAT TECHNOLOGIES and T MOBILE 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 T MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORMAT TECHNOLOGIES and T MOBILE.

Diversification Opportunities for ORMAT TECHNOLOGIES and T MOBILE

0.56

Correlation Coefficient

ORMAT TECHNOLOGIES  T MOBILE

Very weak diversification

The 3 months correlation between ORMAT and TM5 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and T MOBILE INCDL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE INCDL 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 T MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T MOBILE INCDL has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and T MOBILE go up and down completely randomly.

Pair Corralation between ORMAT TECHNOLOGIES and T MOBILE

Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to under-perform the T MOBILE. In addition to that, ORMAT TECHNOLOGIES is 1.04 times more volatile than T MOBILE INCDL 00001. It trades about -0.32 of its total potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about -0.23 per unit of volatility. If you would invest  22,305  in T MOBILE INCDL 00001 on October 10, 2024 and sell it today you would lose (1,645) from holding T MOBILE INCDL 00001 or give up 7.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

ORMAT TECHNOLOGIES  vs.  T MOBILE INCDL 00001

ORMAT TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

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.

T MOBILE INCDL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE INCDL 00001 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T MOBILE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ORMAT TECHNOLOGIES and T MOBILE

The main advantage of trading using opposite ORMAT TECHNOLOGIES and T MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORMAT TECHNOLOGIES position performs unexpectedly, T MOBILE 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 T MOBILE will offset losses from the drop in T MOBILE's long position.

The idea behind ORMAT TECHNOLOGIES and T MOBILE INCDL 00001 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.