Correlation Between Align Technology and Global X
Can any of the company-specific risk be diversified away by investing in both Align Technology and Global X 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 Align Technology and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Global X Funds, you can compare the effects of market volatilities on Align Technology and Global X 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 Align Technology with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Global X.
Diversification Opportunities for Align Technology and Global X
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and Global is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Align Technology 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 Align Technology are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Align Technology i.e., Align Technology and Global X go up and down completely randomly.
Pair Corralation between Align Technology and Global X
Assuming the 90 days trading horizon Align Technology is expected to generate 2.16 times less return on investment than Global X. In addition to that, Align Technology is 1.18 times more volatile than Global X Funds. It trades about 0.07 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.18 per unit of volatility. If you would invest 4,344 in Global X Funds on August 29, 2024 and sell it today you would earn a total of 461.00 from holding Global X Funds or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Align Technology vs. Global X Funds
Performance |
| Timeline |
| Align Technology |
| Global X Funds |
Align Technology and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Global X
The main advantage of trading using opposite Align Technology and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Align Technology vs. G2D Investments | Align Technology vs. UnitedHealth Group Incorporated | Align Technology vs. STMicroelectronics NV | Align Technology vs. MAHLE Metal Leve |
| Global X vs. New Oriental Education | Global X vs. Align Technology | Global X vs. Apartment Investment and | Global X vs. Paycom Software |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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