Correlation Between Align Technology and NATIONAL HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Align Technology and NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and NATIONAL HEALTHCARE, you can compare the effects of market volatilities on Align Technology and NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and NATIONAL HEALTHCARE.
Diversification Opportunities for Align Technology and NATIONAL HEALTHCARE
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Align and NATIONAL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and NATIONAL HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL HEALTHCARE has no effect on the direction of Align Technology i.e., Align Technology and NATIONAL HEALTHCARE go up and down completely randomly.
Pair Corralation between Align Technology and NATIONAL HEALTHCARE
Assuming the 90 days horizon Align Technology is expected to under-perform the NATIONAL HEALTHCARE. In addition to that, Align Technology is 1.0 times more volatile than NATIONAL HEALTHCARE. It trades about -0.57 of its total potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about -0.27 per unit of volatility. If you would invest 9,600 in NATIONAL HEALTHCARE on December 11, 2024 and sell it today you would lose (1,100) from holding NATIONAL HEALTHCARE or give up 11.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. NATIONAL HEALTHCARE
Performance |
| Timeline |
| Align Technology |
| NATIONAL HEALTHCARE |
Align Technology and NATIONAL HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and NATIONAL HEALTHCARE
The main advantage of trading using opposite Align Technology and NATIONAL HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE will offset losses from the drop in NATIONAL HEALTHCARE's long position.| Align Technology vs. GMO Internet | Align Technology vs. LG Display Co | Align Technology vs. CENTURIA OFFICE REIT | Align Technology vs. Infrastrutture Wireless Italiane |
| NATIONAL HEALTHCARE vs. Siamgas And Petrochemicals | NATIONAL HEALTHCARE vs. MARKET VECTR RETAIL | NATIONAL HEALTHCARE vs. FAST RETAIL ADR | NATIONAL HEALTHCARE vs. Varengold Bank AG |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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