Correlation Between Align Technology and Second Sight
Can any of the company-specific risk be diversified away by investing in both Align Technology and Second Sight 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 Second Sight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Second Sight Medical, you can compare the effects of market volatilities on Align Technology and Second Sight 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 Second Sight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Second Sight.
Diversification Opportunities for Align Technology and Second Sight
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Align and Second is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Second Sight Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Second Sight Medical 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 Second Sight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Second Sight Medical has no effect on the direction of Align Technology i.e., Align Technology and Second Sight go up and down completely randomly.
Pair Corralation between Align Technology and Second Sight
If you would invest 414.00 in Second Sight Medical on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Second Sight Medical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Align Technology vs. Second Sight Medical
Performance |
| Timeline |
| Align Technology |
| Second Sight Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Align Technology and Second Sight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Second Sight
The main advantage of trading using opposite Align Technology and Second Sight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Second Sight 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 Second Sight will offset losses from the drop in Second Sight's long position.The idea behind Align Technology and Second Sight Medical 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.| Second Sight vs. GameStop Corp | Second Sight vs. Boyd Gaming | Second Sight vs. Western Acquisition Ventures | Second Sight vs. Griffon |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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