Correlation Between Align Technology and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Align Technology and Peijia Medical 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 Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Peijia Medical Limited, you can compare the effects of market volatilities on Align Technology and Peijia Medical 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 Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Peijia Medical.
Diversification Opportunities for Align Technology and Peijia Medical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and Peijia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical 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 Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Align Technology i.e., Align Technology and Peijia Medical go up and down completely randomly.
Pair Corralation between Align Technology and Peijia Medical
Assuming the 90 days horizon Align Technology is expected to under-perform the Peijia Medical. But the stock apears to be less risky and, when comparing its historical volatility, Align Technology is 1.04 times less risky than Peijia Medical. The stock trades about -0.27 of its potential returns per unit of risk. The Peijia Medical Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Peijia Medical Limited on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Peijia Medical Limited or generate 2.22% 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. Peijia Medical Limited
Performance |
| Timeline |
| Align Technology |
| Peijia Medical |
Align Technology and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Peijia Medical
The main advantage of trading using opposite Align Technology and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Align Technology vs. Geely Automobile Holdings | Align Technology vs. Choice Hotels International | Align Technology vs. Host Hotels Resorts | Align Technology vs. SOLSTAD OFFSHORE NK |
| Peijia Medical vs. Guangdong Investment Limited | Peijia Medical vs. CARSALESCOM | Peijia Medical vs. Tradeweb Markets | Peijia Medical vs. Scottish Mortgage Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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