Correlation Between HomeToGo and Align Technology
Can any of the company-specific risk be diversified away by investing in both HomeToGo 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 HomeToGo and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Align Technology, you can compare the effects of market volatilities on HomeToGo 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 HomeToGo with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Align Technology.
Diversification Opportunities for HomeToGo and Align Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HomeToGo and Align is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and HomeToGo 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 HomeToGo SE 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 HomeToGo i.e., HomeToGo and Align Technology go up and down completely randomly.
Pair Corralation between HomeToGo and Align Technology
Assuming the 90 days trading horizon HomeToGo SE is expected to generate 1.31 times more return on investment than Align Technology. However, HomeToGo is 1.31 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 181.00 in HomeToGo SE on September 2, 2024 and sell it today you would earn a total of 34.00 from holding HomeToGo SE or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. Align Technology
Performance |
| Timeline |
| HomeToGo SE |
| Align Technology |
HomeToGo and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Align Technology
The main advantage of trading using opposite HomeToGo and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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.| HomeToGo vs. LG Display Co | HomeToGo vs. ANGLER GAMING PLC | HomeToGo vs. QINGCI GAMES INC | HomeToGo vs. GameStop Corp |
| Align Technology vs. G8 EDUCATION | Align Technology vs. Hitachi Construction Machinery | Align Technology vs. IDP EDUCATION LTD | Align Technology vs. Penta Ocean Construction Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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