Correlation Between Align Technology and Stryker
Can any of the company-specific risk be diversified away by investing in both Align Technology and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Stryker, you can compare the effects of market volatilities on Align Technology and Stryker 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 Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Stryker.
Diversification Opportunities for Align Technology and Stryker
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Align and Stryker is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 Stryker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryker has no effect on the direction of Align Technology i.e., Align Technology and Stryker go up and down completely randomly.
Pair Corralation between Align Technology and Stryker
Assuming the 90 days horizon Align Technology is expected to under-perform the Stryker. In addition to that, Align Technology is 1.69 times more volatile than Stryker. It trades about -0.31 of its total potential returns per unit of risk. Stryker is currently generating about -0.02 per unit of volatility. If you would invest 37,490 in Stryker on November 27, 2024 and sell it today you would lose (290.00) from holding Stryker or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Stryker
Performance |
| Timeline |
| Align Technology |
| Stryker |
Align Technology and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Stryker
The main advantage of trading using opposite Align Technology and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Stryker 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 Stryker will offset losses from the drop in Stryker's long position.| Align Technology vs. PEPTONIC MEDICAL | Align Technology vs. INDO RAMA SYNTHETIC | Align Technology vs. Peijia Medical Limited | Align Technology vs. CHEMICAL INDUSTRIES |
| Stryker vs. THAI BEVERAGE | Stryker vs. China Resources Beer | Stryker vs. East Africa Metals | Stryker vs. ScanSource |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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