Correlation Between ORMAT TECHNOLOGIES and Goosehead Insurance

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

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

Diversification Opportunities for ORMAT TECHNOLOGIES and Goosehead Insurance

-0.6

Correlation Coefficient

ORMAT TECHNOLOGIES  Goosehead Insurance

Excellent diversification

The 3 months correlation between ORMAT and Goosehead is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance 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 Goosehead Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goosehead Insurance has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Goosehead Insurance go up and down completely randomly.

Pair Corralation between ORMAT TECHNOLOGIES and Goosehead Insurance

Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 0.67 times more return on investment than Goosehead Insurance. However, ORMAT TECHNOLOGIES is 1.48 times less risky than Goosehead Insurance. It trades about 0.19 of its potential returns per unit of risk. Goosehead Insurance is currently generating about 0.02 per unit of risk. If you would invest  6,254  in ORMAT TECHNOLOGIES on April 21, 2025 and sell it today you would earn a total of  1,342  from holding ORMAT TECHNOLOGIES or generate 21.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ORMAT TECHNOLOGIES  vs.  Goosehead Insurance

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.

Goosehead Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goosehead Insurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Goosehead Insurance 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 Goosehead Insurance

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

The idea behind ORMAT TECHNOLOGIES and Goosehead Insurance 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..