Correlation Between ANGANG STEEL and Align Technology
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Align Technology, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Align Technology.
Diversification Opportunities for ANGANG STEEL and Align Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGANG and Align is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and Align Technology go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Align Technology
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 2.2 times more return on investment than Align Technology. However, ANGANG STEEL is 2.2 times more volatile than Align Technology. It trades about 0.11 of its potential returns per unit of risk. Align Technology is currently generating about 0.04 per unit of risk. If you would invest 12.00 in ANGANG STEEL H on November 2, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Align Technology
Performance |
| Timeline |
| ANGANG STEEL H |
| Align Technology |
ANGANG STEEL and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Align Technology
The main advantage of trading using opposite ANGANG STEEL and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. THORNEY TECHS LTD | ANGANG STEEL vs. Tradegate AG Wertpapierhandelsbank | ANGANG STEEL vs. GLG LIFE TECH | ANGANG STEEL vs. VELA TECHNOLPLC LS 0001 |
| Align Technology vs. Nok Airlines PCL | Align Technology vs. Flutter Entertainment PLC | Align Technology vs. Gol Intelligent Airlines | Align Technology vs. Melco Resorts Entertainment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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