Correlation Between Align Technology and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Align Technology and Xinhua Winshare 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 Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Align Technology and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Xinhua Winshare.
Diversification Opportunities for Align Technology and Xinhua Winshare
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Align and Xinhua is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Align Technology i.e., Align Technology and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Align Technology and Xinhua Winshare
Assuming the 90 days horizon Align Technology is expected to generate 1.12 times more return on investment than Xinhua Winshare. However, Align Technology is 1.12 times more volatile than Xinhua Winshare Publishing. It trades about 0.22 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.23 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Align Technology |
| Xinhua Winshare Publ |
Align Technology and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Xinhua Winshare
The main advantage of trading using opposite Align Technology and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare'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 |
| Xinhua Winshare vs. HYDROFARM HLD GRP | Xinhua Winshare vs. Federal Agricultural Mortgage | Xinhua Winshare vs. H FARM SPA | Xinhua Winshare vs. Corporate Office Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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