Correlation Between CryoLife and Align Technology
Can any of the company-specific risk be diversified away by investing in both CryoLife and Align Technology 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 CryoLife and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CryoLife and Align Technology, you can compare the effects of market volatilities on CryoLife and Align Technology 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 CryoLife with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CryoLife and Align Technology.
Diversification Opportunities for CryoLife and Align Technology
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CryoLife and Align is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CryoLife and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and CryoLife 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 CryoLife are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of CryoLife i.e., CryoLife and Align Technology go up and down completely randomly.
Pair Corralation between CryoLife and Align Technology
Assuming the 90 days horizon CryoLife is expected to generate 1.1 times more return on investment than Align Technology. However, CryoLife is 1.1 times more volatile than Align Technology. It trades about 0.27 of its potential returns per unit of risk. Align Technology is currently generating about 0.25 per unit of risk. If you would invest 2,435 in CryoLife on August 30, 2024 and sell it today you would earn a total of 285.00 from holding CryoLife or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CryoLife vs. Align Technology
Performance |
| Timeline |
| CryoLife |
| Align Technology |
CryoLife and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CryoLife and Align Technology
The main advantage of trading using opposite CryoLife and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CryoLife position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| CryoLife vs. Playtech plc | CryoLife vs. INTERSHOP Communications Aktiengesellschaft | CryoLife vs. ORMAT TECHNOLOGIES | CryoLife vs. Singapore Telecommunications Limited |
| Align Technology vs. Abbott Laboratories | Align Technology vs. Medtronic PLC | Align Technology vs. Stryker | Align Technology vs. Boston Scientific |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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