Correlation Between Penumbra and Align Technology
Can any of the company-specific risk be diversified away by investing in both Penumbra 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 Penumbra and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penumbra and Align Technology, you can compare the effects of market volatilities on Penumbra 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 Penumbra with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penumbra and Align Technology.
Diversification Opportunities for Penumbra and Align Technology
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Penumbra and Align is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Penumbra 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 Penumbra 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 Penumbra i.e., Penumbra and Align Technology go up and down completely randomly.
Pair Corralation between Penumbra and Align Technology
Considering the 90-day investment horizon Penumbra is expected to generate 0.95 times more return on investment than Align Technology. However, Penumbra is 1.05 times less risky than Align Technology. It trades about 0.38 of its potential returns per unit of risk. Align Technology is currently generating about 0.1 per unit of risk. If you would invest 20,655 in Penumbra on August 25, 2024 and sell it today you would earn a total of 3,829 from holding Penumbra or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penumbra vs. Align Technology
Performance |
| Timeline |
| Penumbra |
| Align Technology |
Penumbra and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penumbra and Align Technology
The main advantage of trading using opposite Penumbra and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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.| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
| Align Technology vs. Insulet | Align Technology vs. Tandem Diabetes Care | Align Technology vs. Abbott Laboratories | Align Technology vs. Stryker |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |