Correlation Between Align Technology and Fiskars Oyj
Can any of the company-specific risk be diversified away by investing in both Align Technology and Fiskars Oyj 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 Fiskars Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Fiskars Oyj Abp, you can compare the effects of market volatilities on Align Technology and Fiskars Oyj 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 Fiskars Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Fiskars Oyj.
Diversification Opportunities for Align Technology and Fiskars Oyj
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and Fiskars is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Fiskars Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiskars Oyj Abp 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 Fiskars Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiskars Oyj Abp has no effect on the direction of Align Technology i.e., Align Technology and Fiskars Oyj go up and down completely randomly.
Pair Corralation between Align Technology and Fiskars Oyj
Assuming the 90 days horizon Align Technology is expected to generate 1.18 times more return on investment than Fiskars Oyj. However, Align Technology is 1.18 times more volatile than Fiskars Oyj Abp. It trades about 0.24 of its potential returns per unit of risk. Fiskars Oyj Abp is currently generating about -0.14 per unit of risk. If you would invest 20,600 in Align Technology on September 12, 2024 and sell it today you would earn a total of 1,870 from holding Align Technology or generate 9.08% 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. Fiskars Oyj Abp
Performance |
| Timeline |
| Align Technology |
| Fiskars Oyj Abp |
Align Technology and Fiskars Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Fiskars Oyj
The main advantage of trading using opposite Align Technology and Fiskars Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Fiskars Oyj 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 Fiskars Oyj will offset losses from the drop in Fiskars Oyj's long position.| Align Technology vs. Superior Plus Corp | Align Technology vs. SIVERS SEMICONDUCTORS AB | Align Technology vs. Norsk Hydro ASA | Align Technology vs. Reliance Steel Aluminum |
| Fiskars Oyj vs. Lowes Companies | Fiskars Oyj vs. Haverty Furniture Companies | Fiskars Oyj vs. Superior Plus Corp | Fiskars Oyj vs. SIVERS SEMICONDUCTORS AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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