Correlation Between Align Technology and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Align Technology and Origin Energy 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 Origin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Origin Energy Limited, you can compare the effects of market volatilities on Align Technology and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Origin Energy.
Diversification Opportunities for Align Technology and Origin Energy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Align and Origin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Origin Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy Limited 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy Limited has no effect on the direction of Align Technology i.e., Align Technology and Origin Energy go up and down completely randomly.
Pair Corralation between Align Technology and Origin Energy
Assuming the 90 days horizon Align Technology is expected to generate 0.98 times more return on investment than Origin Energy. However, Align Technology is 1.02 times less risky than Origin Energy. It trades about 0.16 of its potential returns per unit of risk. Origin Energy Limited is currently generating about -0.08 per unit of risk. If you would invest 20,210 in Align Technology on November 3, 2024 and sell it today you would earn a total of 1,310 from holding Align Technology or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Origin Energy Limited
Performance |
| Timeline |
| Align Technology |
| Origin Energy Limited |
Align Technology and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Origin Energy
The main advantage of trading using opposite Align Technology and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Align Technology vs. G8 EDUCATION | Align Technology vs. TRI CHEMICAL LABORATINC | Align Technology vs. Silicon Motion Technology | Align Technology vs. SEKISUI CHEMICAL |
| Origin Energy vs. SENECA FOODS A | Origin Energy vs. MAG SILVER | Origin Energy vs. MOLSON RS BEVERAGE | Origin Energy vs. GALENA MINING LTD |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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