Correlation Between ORMAT TECHNOLOGIES and Axcelis Technologies

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

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

Diversification Opportunities for ORMAT TECHNOLOGIES and Axcelis Technologies

0.84

Correlation Coefficient

ORMAT TECHNOLOGIES  Axcelis Technologies

Very poor diversification

The 3 months correlation between ORMAT and Axcelis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ORMAT TECHNOLOGIES and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies 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 Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of ORMAT TECHNOLOGIES i.e., ORMAT TECHNOLOGIES and Axcelis Technologies go up and down completely randomly.

Pair Corralation between ORMAT TECHNOLOGIES and Axcelis Technologies

Assuming the 90 days trading horizon ORMAT TECHNOLOGIES is expected to generate 2.32 times less return on investment than Axcelis Technologies. But when comparing it to its historical volatility, ORMAT TECHNOLOGIES is 1.95 times less risky than Axcelis Technologies. It trades about 0.19 of its potential returns per unit of risk. Axcelis Technologies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,929  in Axcelis Technologies on April 21, 2025 and sell it today you would earn a total of  2,165  from holding Axcelis Technologies or generate 55.1% return on investment over 90 days.

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

ORMAT TECHNOLOGIES  vs.  Axcelis Technologies

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.

Axcelis Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axcelis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ORMAT TECHNOLOGIES and Axcelis Technologies

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

The idea behind ORMAT TECHNOLOGIES and Axcelis 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.