Correlation Between FUYO GENERAL and ORMAT TECHNOLOGIES

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

By analyzing existing cross correlation between FUYO GENERAL LEASE and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and ORMAT TECHNOLOGIES.

Diversification Opportunities for FUYO GENERAL and ORMAT TECHNOLOGIES

-0.8

Correlation Coefficient

FUYO GENERAL  ORMAT TECHNOLOGIES

Pay attention - limited upside

The 3 months correlation between FUYO and ORMAT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and ORMAT TECHNOLOGIES go up and down completely randomly.

Pair Corralation between FUYO GENERAL and ORMAT TECHNOLOGIES

Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the ORMAT TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.69 times less risky than ORMAT TECHNOLOGIES. The stock trades about -0.12 of its potential returns per unit of risk. The ORMAT TECHNOLOGIES is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,292  in ORMAT TECHNOLOGIES on April 24, 2025 and sell it today you would earn a total of  1,376  from holding ORMAT TECHNOLOGIES or generate 21.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

FUYO GENERAL LEASE  vs.  ORMAT TECHNOLOGIES

FUYO GENERAL LEASE

Risk-Adjusted Performance

Very Weak

Over the last 90 days FUYO GENERAL LEASE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ORMAT TECHNOLOGIES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ORMAT TECHNOLOGIES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ORMAT TECHNOLOGIES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FUYO GENERAL and ORMAT TECHNOLOGIES

The main advantage of trading using opposite FUYO GENERAL and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.

The idea behind FUYO GENERAL LEASE and ORMAT TECHNOLOGIES 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..