Correlation Between Aethlon Medical and Align Technology
Can any of the company-specific risk be diversified away by investing in both Aethlon Medical 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 Aethlon Medical and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aethlon Medical and Align Technology, you can compare the effects of market volatilities on Aethlon Medical 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 Aethlon Medical with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aethlon Medical and Align Technology.
Diversification Opportunities for Aethlon Medical and Align Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aethlon and Align is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon Medical and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Aethlon Medical 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 Aethlon Medical 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 Aethlon Medical i.e., Aethlon Medical and Align Technology go up and down completely randomly.
Pair Corralation between Aethlon Medical and Align Technology
Given the investment horizon of 90 days Aethlon Medical is expected to under-perform the Align Technology. In addition to that, Aethlon Medical is 1.69 times more volatile than Align Technology. It trades about -0.04 of its total potential returns per unit of risk. Align Technology is currently generating about 0.04 per unit of volatility. If you would invest 21,964 in Align Technology on January 19, 2024 and sell it today you would earn a total of 8,170 from holding Align Technology or generate 37.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aethlon Medical vs. Align Technology
Performance |
Timeline |
Aethlon Medical |
Align Technology |
Aethlon Medical and Align Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aethlon Medical and Align Technology
The main advantage of trading using opposite Aethlon Medical and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aethlon Medical 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.Aethlon Medical vs. Inari MedicalInc | Aethlon Medical vs. CONMED | Aethlon Medical vs. Glaukos Corp | Aethlon Medical vs. Nevro Corp |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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