Correlation Between Align Technology and Elevance Health,

Can any of the company-specific risk be diversified away by investing in both Align Technology and Elevance Health, 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 Align Technology and Elevance Health, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Align Technology and Elevance Health,, you can compare the effects of market volatilities on Align Technology and Elevance Health, 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 Align Technology with a short position of Elevance Health,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Elevance Health,.

Diversification Opportunities for Align Technology and Elevance Health,

-0.41

Correlation Coefficient

Align Technology  Elevance Health,

Very good diversification

The 3 months correlation between Align and Elevance is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Elevance Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevance Health, and Align Technology 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 Align Technology are associated (or correlated) with Elevance Health,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevance Health, has no effect on the direction of Align Technology i.e., Align Technology and Elevance Health, go up and down completely randomly.

Pair Corralation between Align Technology and Elevance Health,

Assuming the 90 days trading horizon Align Technology is expected to generate 0.9 times more return on investment than Elevance Health,. However, Align Technology is 1.11 times less risky than Elevance Health,. It trades about -0.04 of its potential returns per unit of risk. Elevance Health, is currently generating about -0.15 per unit of risk. If you would invest  32,703  in Align Technology on October 25, 2024 and sell it today you would lose (160.00) from holding Align Technology or give up 0.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Align Technology  vs.  Elevance Health,

Align Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Align Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Elevance Health,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elevance Health, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Elevance Health, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Align Technology and Elevance Health,

The main advantage of trading using opposite Align Technology and Elevance Health, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Elevance Health, 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 Elevance Health, will offset losses from the drop in Elevance Health,'s long position.

The idea behind Align Technology and Elevance Health, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.