Correlation Between Align Technology and SANOK RUBBER

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

By analyzing existing cross correlation between Align Technology and SANOK RUBBER ZY, you can compare the effects of market volatilities on Align Technology and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and SANOK RUBBER.

Diversification Opportunities for Align Technology and SANOK RUBBER

-0.13

Correlation Coefficient

Align Technology  SANOK RUBBER

Good diversification

The 3 months correlation between Align and SANOK is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Align Technology i.e., Align Technology and SANOK RUBBER go up and down completely randomly.

Pair Corralation between Align Technology and SANOK RUBBER

Assuming the 90 days horizon Align Technology is expected to under-perform the SANOK RUBBER. In addition to that, Align Technology is 1.31 times more volatile than SANOK RUBBER ZY. It trades about -0.25 of its total potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.45 per unit of volatility. If you would invest  442.00  in SANOK RUBBER ZY on October 4, 2024 and sell it today you would earn a total of  61.00  from holding SANOK RUBBER ZY or generate 13.8% return on investment over 90 days.

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

Align Technology  vs.  SANOK RUBBER ZY

Align Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Align Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Align Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SANOK RUBBER ZY

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Align Technology and SANOK RUBBER

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

The idea behind Align Technology and SANOK RUBBER ZY 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.