Correlation Between TRADEDOUBLER and Align Technology

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

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

Diversification Opportunities for TRADEDOUBLER and Align Technology

0.09

Correlation Coefficient

TRADEDOUBLER  Align Technology

Significant diversification

The 3 months correlation between TRADEDOUBLER and Align is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and Align Technology go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and Align Technology

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 1.8 times more return on investment than Align Technology. However, TRADEDOUBLER is 1.8 times more volatile than Align Technology. It trades about 0.05 of its potential returns per unit of risk. Align Technology is currently generating about 0.03 per unit of risk. If you would invest  27.00  in TRADEDOUBLER AB SK on October 11, 2024 and sell it today you would earn a total of  2.00  from holding TRADEDOUBLER AB SK or generate 7.41% return on investment over 90 days.

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

TRADEDOUBLER AB SK  vs.  Align Technology

TRADEDOUBLER AB SK

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Align Technology

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with TRADEDOUBLER and Align Technology

The main advantage of trading using opposite TRADEDOUBLER and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.

The idea behind TRADEDOUBLER AB SK and Align Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.