Correlation Between Align Technology and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Align Technology and Hyatt Hotels 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 Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Hyatt Hotels, you can compare the effects of market volatilities on Align Technology and Hyatt Hotels 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 Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Hyatt Hotels.
Diversification Opportunities for Align Technology and Hyatt Hotels
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Align and Hyatt is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Align Technology i.e., Align Technology and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Align Technology and Hyatt Hotels
Assuming the 90 days horizon Align Technology is expected to generate 1.68 times more return on investment than Hyatt Hotels. However, Align Technology is 1.68 times more volatile than Hyatt Hotels. It trades about 0.19 of its potential returns per unit of risk. Hyatt Hotels is currently generating about -0.07 per unit of risk. If you would invest 20,080 in Align Technology on October 31, 2024 and sell it today you would earn a total of 1,380 from holding Align Technology or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Hyatt Hotels
Performance |
| Timeline |
| Align Technology |
| Hyatt Hotels |
Align Technology and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Hyatt Hotels
The main advantage of trading using opposite Align Technology and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Align Technology vs. GAMESTOP | Align Technology vs. GigaMedia | Align Technology vs. GAMING FAC SA | Align Technology vs. Siemens Healthineers AG |
| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. Hilton Worldwide Holdings | Hyatt Hotels vs. H World Group | Hyatt Hotels vs. InterContinental Hotels Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |