Correlation Between DAX Index and Align Technology
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By analyzing existing cross correlation between DAX Index and Align Technology, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Align Technology.
Diversification Opportunities for DAX Index and Align Technology
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Align is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Align Technology go up and down completely randomly.
Pair Corralation between DAX Index and Align Technology
Assuming the 90 days trading horizon DAX Index is expected to generate 1.33 times less return on investment than Align Technology. But when comparing it to its historical volatility, DAX Index is 3.75 times less risky than Align Technology. It trades about 0.08 of its potential returns per unit of risk. Align Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,762 in Align Technology on August 29, 2024 and sell it today you would earn a total of 3,818 from holding Align Technology or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Align Technology
Performance |
| Timeline |
DAX Index and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Align Technology
Pair trading matchups for Align Technology
Pair Trading with DAX Index and Align Technology
The main advantage of trading using opposite DAX Index and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Align Technology vs. Superior Plus Corp | Align Technology vs. NMI Holdings | Align Technology vs. Origin Agritech | Align Technology vs. SIVERS SEMICONDUCTORS AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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