Correlation Between FIRST SHIP and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP 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 FIRST SHIP and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on FIRST SHIP 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 FIRST SHIP with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and ORMAT TECHNOLOGIES.
Diversification Opportunities for FIRST SHIP and ORMAT TECHNOLOGIES
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and ORMAT is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and FIRST SHIP 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 FIRST SHIP 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 FIRST SHIP i.e., FIRST SHIP and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between FIRST SHIP and ORMAT TECHNOLOGIES
Assuming the 90 days horizon FIRST SHIP is expected to generate 3.12 times less return on investment than ORMAT TECHNOLOGIES. In addition to that, FIRST SHIP is 1.87 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.03 of its total potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.2 per unit of volatility. 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FIRST SHIP LEASE vs. ORMAT TECHNOLOGIES
Performance |
Timeline |
FIRST SHIP LEASE |
ORMAT TECHNOLOGIES |
FIRST SHIP and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FIRST SHIP and ORMAT TECHNOLOGIES
The main advantage of trading using opposite FIRST SHIP and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP 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.FIRST SHIP vs. QBE Insurance Group | FIRST SHIP vs. Lamar Advertising | FIRST SHIP vs. MUTUIONLINE | FIRST SHIP vs. LIFENET INSURANCE CO |
ORMAT TECHNOLOGIES vs. CITIC Telecom International | ORMAT TECHNOLOGIES vs. Iridium Communications | ORMAT TECHNOLOGIES vs. FIRST SHIP LEASE | ORMAT TECHNOLOGIES vs. Global Ship Lease |
Check out your portfolio center.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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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