Correlation Between Postal Savings and Align Technology
Can any of the company-specific risk be diversified away by investing in both Postal Savings and Align Technology 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 Postal Savings and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Align Technology, you can compare the effects of market volatilities on Postal Savings and Align Technology 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 Postal Savings with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Align Technology.
Diversification Opportunities for Postal Savings and Align Technology
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Postal and Align is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Postal Savings 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 Postal Savings Bank are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Postal Savings i.e., Postal Savings and Align Technology go up and down completely randomly.
Pair Corralation between Postal Savings and Align Technology
Assuming the 90 days horizon Postal Savings is expected to generate 32.31 times less return on investment than Align Technology. In addition to that, Postal Savings is 1.05 times more volatile than Align Technology. It trades about 0.01 of its total potential returns per unit of risk. Align Technology is currently generating about 0.3 per unit of volatility. If you would invest 19,370 in Align Technology on August 31, 2024 and sell it today you would earn a total of 2,290 from holding Align Technology or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Postal Savings Bank vs. Align Technology
Performance |
| Timeline |
| Postal Savings Bank |
| Align Technology |
Postal Savings and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Align Technology
The main advantage of trading using opposite Postal Savings and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Postal Savings vs. ANTA SPORTS PRODUCT | Postal Savings vs. USWE SPORTS AB | Postal Savings vs. PARKEN Sport Entertainment | Postal Savings vs. ADRIATIC METALS LS 013355 |
| Align Technology vs. Stryker | Align Technology vs. Insulet | Align Technology vs. Superior Plus Corp | Align Technology vs. NMI Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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