Correlation Between Align Technology and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both Align Technology and Nisshinbo Holdings 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 Nisshinbo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Nisshinbo Holdings, you can compare the effects of market volatilities on Align Technology and Nisshinbo Holdings 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Nisshinbo Holdings.
Diversification Opportunities for Align Technology and Nisshinbo Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Align and Nisshinbo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of Align Technology i.e., Align Technology and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between Align Technology and Nisshinbo Holdings
Assuming the 90 days horizon Align Technology is expected to generate 1.4 times more return on investment than Nisshinbo Holdings. However, Align Technology is 1.4 times more volatile than Nisshinbo Holdings. It trades about 0.03 of its potential returns per unit of risk. Nisshinbo Holdings is currently generating about -0.09 per unit of risk. If you would invest 20,640 in Align Technology on October 25, 2024 and sell it today you would earn a total of 1,270 from holding Align Technology or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Nisshinbo Holdings
Performance |
| Timeline |
| Align Technology |
| Nisshinbo Holdings |
Align Technology and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Nisshinbo Holdings
The main advantage of trading using opposite Align Technology and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Nisshinbo Holdings 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| Align Technology vs. SQUIRREL MEDIA SA | Align Technology vs. RCS MediaGroup SpA | Align Technology vs. STMICROELECTRONICS | Align Technology vs. Live Nation Entertainment |
| Nisshinbo Holdings vs. Coeur Mining | Nisshinbo Holdings vs. Telecom Argentina SA | Nisshinbo Holdings vs. Citic Telecom International | Nisshinbo Holdings vs. Iridium Communications |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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