Correlation Between Align Technology and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Align Technology and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Samsung Electronics Co, you can compare the effects of market volatilities on Align Technology and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Samsung Electronics.
Diversification Opportunities for Align Technology and Samsung Electronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Align and Samsung is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Align Technology i.e., Align Technology and Samsung Electronics go up and down completely randomly.
Pair Corralation between Align Technology and Samsung Electronics
Assuming the 90 days horizon Align Technology is expected to generate 0.63 times more return on investment than Samsung Electronics. However, Align Technology is 1.58 times less risky than Samsung Electronics. It trades about 0.22 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 20,680 in Align Technology on September 13, 2024 and sell it today you would earn a total of 1,720 from holding Align Technology or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Samsung Electronics Co
Performance |
| Timeline |
| Align Technology |
| Samsung Electronics |
Align Technology and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Samsung Electronics
The main advantage of trading using opposite Align Technology and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' 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 |
| Samsung Electronics vs. Sony Group | Samsung Electronics vs. Superior Plus Corp | Samsung Electronics vs. SIVERS SEMICONDUCTORS AB | Samsung Electronics vs. Norsk Hydro ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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