Correlation Between Align Technology and Intel
Can any of the company-specific risk be diversified away by investing in both Align Technology and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Intel, you can compare the effects of market volatilities on Align Technology and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Intel.
Diversification Opportunities for Align Technology and Intel
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and Intel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Align Technology i.e., Align Technology and Intel go up and down completely randomly.
Pair Corralation between Align Technology and Intel
Assuming the 90 days trading horizon Align Technology is expected to generate 1.88 times less return on investment than Intel. But when comparing it to its historical volatility, Align Technology is 3.1 times less risky than Intel. It trades about 0.21 of its potential returns per unit of risk. Intel is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,195 in Intel on August 27, 2024 and sell it today you would earn a total of 180.00 from holding Intel or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Intel
Performance |
| Timeline |
| Align Technology |
| Intel |
Align Technology and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Intel
The main advantage of trading using opposite Align Technology and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Align Technology vs. Monster Beverage | Align Technology vs. Metalurgica Gerdau SA | Align Technology vs. Verizon Communications | Align Technology vs. MAHLE Metal Leve |
| Intel vs. Bread Financial Holdings | Intel vs. Charter Communications | Intel vs. Capital One Financial | Intel vs. Spotify Technology SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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