Correlation Between Alignment Healthcare and 26441CAP0

Can any of the company-specific risk be diversified away by investing in both Alignment Healthcare and 26441CAP0 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 Alignment Healthcare and 26441CAP0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alignment Healthcare LLC and DUKE ENERGY P, you can compare the effects of market volatilities on Alignment Healthcare and 26441CAP0 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 Alignment Healthcare with a short position of 26441CAP0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alignment Healthcare and 26441CAP0.

Diversification Opportunities for Alignment Healthcare and 26441CAP0

0.17

Correlation Coefficient

Alignment Healthcare  26441CAP0

Average diversification

The 3 months correlation between Alignment and 26441CAP0 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and DUKE ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY P and Alignment Healthcare 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 Alignment Healthcare LLC are associated (or correlated) with 26441CAP0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY P has no effect on the direction of Alignment Healthcare i.e., Alignment Healthcare and 26441CAP0 go up and down completely randomly.

Pair Corralation between Alignment Healthcare and 26441CAP0

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to generate 3.92 times more return on investment than 26441CAP0. However, Alignment Healthcare is 3.92 times more volatile than DUKE ENERGY P. It trades about 0.51 of its potential returns per unit of risk. DUKE ENERGY P is currently generating about 0.03 per unit of risk. If you would invest  1,084  in Alignment Healthcare LLC on October 26, 2024 and sell it today you would earn a total of  413.00  from holding Alignment Healthcare LLC or generate 38.1% return on investment over 90 days.

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

Alignment Healthcare LLC  vs.  DUKE ENERGY P

Alignment Healthcare LLC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alignment Healthcare LLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, Alignment Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

DUKE ENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26441CAP0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alignment Healthcare and 26441CAP0

The main advantage of trading using opposite Alignment Healthcare and 26441CAP0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alignment Healthcare position performs unexpectedly, 26441CAP0 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 26441CAP0 will offset losses from the drop in 26441CAP0's long position.

The idea behind Alignment Healthcare LLC and DUKE ENERGY P 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.